[Senate Hearing 106-928]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-928


        DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 2001

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

                                HEARING

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                       H.R. 4942 and 5633/S. 3041

  AN ACT MAKING APPROPRIATIONS FOR THE GOVERNMENT OF THE DISTRICT OF 
 COLUMBIA AND OTHER ACTIVITIES CHARGEABLE IN WHOLE OR IN PART AGAINST 
THE REVENUES OF SAID DISTRICT FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 
                      2001, AND FOR OTHER PURPOSES

                               __________

                  Council of the District of Columbia
      Financial Responsibility and Management Assistance Authority
                          Office of the Mayor

                               __________

         Printed for the use of the Committee on Appropriations




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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
62-772 cc                   WASHINGTON : 2001
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402




                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             FRANK R. LAUTENBERG, New Jersey
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
JON KYL, Arizona
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

                Subcommittee on the District of Columbia

                 KAY BAILEY HUTCHISON, Texas, Chairman
JON KYL, Arizona                     RICHARD J. DURBIN, Illinois
TED STEVENS, Alaska, (ex officio)    ROBERT C. BYRD, West Virginia (ex 
                                         officio)
                           Professional Staff

                          Mary Beth Nethercutt
                        Terry Sauvain (Minority)

                         Administrative Support

                         Liz Blevins (Minority)




                            C O N T E N T S

                              ----------                              

                         Tuesday, June 13, 2000

                                                                   Page
Council of the District of Columbia..............................     1
Financial Responsibility and Management Assistance Authority.....     1
Office of the Mayor..............................................     1
Nondepartmental witness..........................................    87

 
        DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              


                         TUESDAY, JUNE 13, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11:06 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Kay Bailey Hutchison (chairman) 
presiding.
    Present: Senators Hutchison, Kyl, and Durbin.

                          DISTRICT OF COLUMBIA

                          Office of the Mayor

STATEMENT OF HON. ANTHONY A. WILLIAMS, MAYOR

                  Council of the District of Columbia

STATEMENT OF LINDA W. CROPP, CHAIRMAN

      Financial Responsibility and Management Assistance Authority

STATEMENT OF DR. ALICE RIVLIN, MEMBER


           OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON


    Senator Hutchison. I would like to make a short opening 
statement, and then we have two other Senators who are going to 
be late. We are going to start and proceed and then as they 
come, we will certainly welcome them to take part in the 
hearing.
    I want to welcome our witnesses today, Mayor Williams, 
Council Chairman Cropp, and Dr. Rivlin. Each of you is playing 
a critical role in the revitalization of the District of 
Columbia.


                        PERCENT OF FEDERAL FUNDS


    Today's hearing, of course, focuses on the District's 2001 
budget. The Federal Government is providing nearly $400 million 
in direct spending for the District and in combination with 
Federal grants, the U.S. funds 27 percent of the District's 
budget.
    I think there is good news in the District budget. Clearly, 
the City is headed in the right direction financially. For 
fiscal year 2001, I am told you are planning to hold a surplus 
of approximately $260 million above the 4 percent requirement 
of $189 million.


                                RESERVE


    The District is also doing the right thing with the reserve 
fund, continuing to hold the $150 million in emergency reserve. 
There are, I think, some other financial safeguards that should 
benefit the City, and I hope that we can discuss those as we go 
through this process.


                           EDUCATION SPENDING


    Education spending, under this budget, will improve 
dramatically for both the public school system and charter 
schools. Spending will be on a per-pupil basis so that charter 
schools are not discriminated against.


                                TAX CUT


    And the District is continuing with its tax cut that was 
passed last year, reducing property rates and income tax rates, 
hopefully making the District more competitive with neighboring 
jurisdictions. I think these are positive developments.


                              DEBT POLICY


    Having said that, I do see some red flags for the future. I 
believe the District is moving in the wrong direction on debt 
policy. The City is refinancing its debt, albeit saving on 
short-term interest costs, but putting itself in debt for a 
longer term.
    The City already has $3 billion in debt. And it seems to be 
intent on expanding that debt, planning nearly $1.6 billion in 
new debt in the next 5 years.
    In 1999 Moody's Investors Service, assessing the District 
of Columbia, said, `` The District's annual debt service burden 
is projected to remain a heavy 11 to 12 percent of local 
revenues.''


                            PER CAPITA DEBT


    Cities with low debt that receive high bond ratings have 
per capita debt of approximately $743 per person. The 
District's per capita debt ratio is almost $6,200 per person. 
As you can see, the District's debt ratio is far beyond what it 
ought to be.
    In looking at the Moody's comments, they say that all of 
the ratios for the District of Columbia are high when you are 
looking at its debt from any standpoint.
    So I am going to raise the caution flag and say that I 
think the one thing that the District must do to get on a track 
to receive a better bond rating is to look at debt principles 
and a debt policy that is more restrictive rather than less.
    I know there are infrastructure needs, but this kind of 
increasing debt, I think, is the wrong direction. And as we all 
know, we are going into a higher interest rate market.


                             RESERVE FUNDS


    During the budget debate, there was considerable discussion 
about the $150 million reserve fund. I do not believe the fund 
needs to be cumulative. I do believe, however, that the 
District must hold a real reserve each year, and that it must 
only be spent for real emergencies.
    Further, I think dipping into the reserve should be the 
funding source of last resort, and all other surplus funds 
should be exhausted before tapping the emergency fund.
    I will propose that the reserve be placed in a separate 
interest-bearing account so that the public and the market 
watchers will know that the reserve is real and tangible, a 
rainy day account, and not a bookkeeping entry.
    Additionally, if there is a need for unanticipated 
expenses, which we did see this year, versus genuine 
emergencies, then I would be open to providing the City with 
greater flexibility.


                          UNANTICIPATED NEEDS


    Unanticipated needs are those spending items that might 
arise after the budget process or something required by Federal 
legislation, perhaps something due to severe weather or even a 
court order.
    Any new flexibility must be accompanied by more established 
criteria for what is emergency spending and what is simply 
unanticipated. I believe we must have very certain parameters 
if we are going to have greater flexibility, which I think we 
need.
    So let me conclude by reiterating that I think the City's 
overall financial picture is good. I believe that working 
together, we have been able to make some great progress. And I 
think we can craft a budget that will even go further to give 
you needed flexibility but solid financial parameters, so that 
you will continue to build toward a better bond rating and 
lower borrowing costs and, of course, a healthier city.
    I want to thank all of you for being here and for all you 
are doing and for the great working relationship that I feel 
that we have.
    Before we begin with your testimony, I just want to remind 
you that your entire statement will be made part of the record, 
so that if you can limit your opening statement to 5 minutes or 
so, we will put your entire statement on the record.
    And then I will also say that without objection, the record 
will remain open until 5 p.m. on Monday, June 19, 2000 for the 
submission of any additional testimony or responses to 
questions that members may raise as they come.
    As I mentioned, Senator Durbin will be here later, and 
Senator Kyl, as well, will be here later.
    So with that, I would like to recognize Mayor Williams and 
welcome you here.


                 STATEMENT OF MAYOR ANTHONY A. WILLIAMS


    Mayor Williams. Thank you, Madam Chairman, and members of 
the Committee for having us here today to talk about the 
District of Columbia's fiscal year 2001 budget.
    I have submitted my testimony for the record. As I go 
through it, I will try to give you the highlights to allow the 
maximum amount of time for my colleagues to submit their 
testimony and for questions and answers.
    This budget builds upon the strong financial recovery we 
have achieved over recent years. We are going to begin the 2001 
budget having met the three financial goals set by Congress.


                        FOUR CONSECUTIVE BUDGETS


    First, we will have balanced four consecutive budgets, 
those for fiscal year 1997 through fiscal year 2000; second, we 
will have gained full access to credit markets; and third, we 
will have established financial reserves totaling over $400 
million.
    Now that we have stabilized our finances, I believe the 
District government has and must necessarily triple its efforts 
to enhance service delivery for residents and businesses to 
create the climate for investment that will expand our economy 
in the long run.
    Although we still have much work to do in managing 
difficult areas such as procurement and street repairs, tree 
maintenance and infrastructure improvements, we are making 
tremendous strides every day, and will continue to demonstrate 
a strong record of steady improvements.
    Most important among the improvements supported by the 2001 
budget are those that support children. As you know, Senator, 
our budget flows from something we are calling Neighborhood 
Action, where we have brought in the faith leadership, business 
leadership, non-profit leadership and citizens of our city.
    Some 3,000 of them gathered in the convention center to 
talk about a vision for our city. And chief among their goals 
was supporting children and families and building safe and 
prosperous neighborhoods.


                          NEIGHBORHOOD ACTION


    And very importantly, our citizens proceeded with 
Neighborhood Action with the understanding that government 
itself cannot achieve all these goals, but must act as a 
reliable partner with the faith community, with our non-profits 
and, very importantly, with our businesses.
    That is why I am proud that the Council has joined with me 
in a budget that is based on these priorities, including full 
funding for our schools, because as I said in my State of the 
District address at Ballou High School, this budget is an 
education budget.
    I believe if we want our city to attract residents, if we 
want our city to attract businesses that have employees that 
have children that need a school, we are going to have to 
improve our schools. So we are committing full funding for the 
public schools, an increase of $52 million for next year.


                             SCHOOL FUNDING


    This is the first time in over 20 years that a mayor 
proposed a budget with a needed level of funding for our 
schools. And we have balanced the approach of full funding with 
accountability. We are going to be working with the Council to 
see that our schools have, not only strength and accountability 
in terms of a referendum that we are pushing to give more 
direction and control in our school government's process, but 
also to give our schools independence and autonomy in their 
procurement, in their finance, in their personnel, and we hope 
as well in their budget year.
    With this investment, we hope to provide incentive pay for 
teachers who go the extra mile to provide funding for something 
we are calling ``Lead Principals,'' an effort to go out and 
find 30 of the very best principals in the country to work in 
our school system.


                            CHARTER SCHOOLS


    As well, and very, very importantly, the budget expands 
options for public school students and parents. To accommodate 
increasing enrollment in charter schools, we committed $77 
million next year to continue the reform effort. Currently, 
charter school enrollments are increasing year to year, but the 
budgets are based on last year's enrollment.
    And I am hoping over the next year to work with members of 
Congress, Kevin Chavous, the Chair of our Council Committee on 
Education, the Chair of our Council Community Leaders, to 
correct this situation, to ensure that all of our schools are 
funded on a reliable, adequate basis, which I think will save a 
lot of us time and trouble, and allow us to really get at the 
appropriate level of oversight and program evaluation.


                             YOUTH VIOLENCE


    This budget also includes a major continued initiative as 
it relates to youth. We are going to be announcing shortly a 
major youth violence initiative focused on east of the river, 
where we have high incidents of youth violence.
    I have always believed that a key to this is not only a 
relationship between the local and the Federal Government, a 
relationship between our government and the private sector, but 
very importantly on a competitive basis, in partnership with 
the sectors that I described, an investment in out-of-school, 
after-school programs for youth. And so we are continuing in 
the effort, investing in this budget $10 million for after-
school programs.


                           TUITION ASSISTANCE


    I want to spend a minute and talk about tuition assistance 
because this is something in which we have been heavily 
involved with the Congress and with our business leadership.
    I am proud that our business leadership for the first time 
on a regional basis really committed itself to our children in 
this tuition assistance program and joined with the Congress to 
make this happen.
    We all know that to compete in this global economy, it is 
imperative for our kids to continue their education beyond the 
12th grade. The success of Bill Gates is truly one in a 
billion. The rest of us need the opportunity to obtain a 
college degree.
    To that end, I thank all the partners who have made this 
possible. Now, as you may know, the residents of every State in 
the union have a variety of public institutions to choose from.
    Thanks to this tuition assistance grant program in our 
city, the residents of the District will now have the same 
choices as residents of other States.
    We face many challenges in getting the tuition assistance 
grant program up and running. We must design and build an 
administrative process that utilizes the latest technology and 
must do it even as we administer the program.
    This is a costly and painstaking undertaking. It is also 
important to understand that administrative outlays in the 
first few years of the program are slightly higher than they 
should be. That is why I have taken the step of investing 
District money into the program over and above the monies 
received from the Federal Government for administration.
    We want to study and match the best practices of other 
State scholarship programs.
    An even more difficult challenge lies in letting our 
population know they have many low-cost, low-tuition choices 
for educating our children. Unfortunately, our young people 
have had too few choices for too many years.
    Too many of our African-American, Latino and Asian youth 
have been deprived and have felt alienated rather than assisted 
and praised. And it has taken a massive public relations effort 
to let our young people know about this innovative program and 
convince them that they now do have a choice. They do have an 
alternative.
    We have also stepped in with District resources to pay for 
this increased outreach. We are pleased at the way our young 
people have responded. Last week, we received over 300 
applications.
    We are finding that 95 percent of those who apply are 
eligible. The current rate of applications gives us great 
confidence that we will oversubscribe our predicted number of 
applications.


                           PELL GRANT PROGRAM


    Only 15 percent of the target population applied for the 
Pell Grant Program in its first year. In the second year, just 
35 percent of the potential applicants submitted an 
application.
    We are well on our way to doubling that second year figure 
in our first year. We are confident that participation in the 
program will increase in each coming year.
    A large proportion of our graduating high school seniors as 
well as students attending eligible institutions will receive 
the D.C. Tuition Assistance Grant. Unfortunately, a large group 
of students, who otherwise would be eligible, have been left 
out. These are District residents that would be seniors in 
college this fall.
    A cutoff date of January 1, 1998, written into the 
legislation, results in most seniors being ineligible for the 
program. I am requesting that Congress reconsider this cutoff.
    By moving it back to January 1, 1997, a whole class of 
students will become eligible. This will give us the ability to 
have a full cohort of students in the program in its first 
year.
    And I am confident that we have the capacity to administer 
a full program, including our college seniors this year.


                           SAFE NEIGHBORHOODS


    In the area of safe neighborhoods, another top priority of 
our city, I will say briefly that in this budget we have 
committed $4.4 million to hire 175 more police officers. And I 
am going to continue to challenge the police, the prosecutors, 
and the courts to manage our resources efficiently, and get 
more out of our officers on the beat where we need them.


                          GUN BUYBACK PROGRAM


    Second, as part of MPD's budget, we will continue our gun 
buyback program, which collected almost 3,000 guns last year.
    Third, we will continue our Capitol Communities Initiative 
to shut down open air drug markets in our city. We have already 
seen the benefits of community policing in these neighborhoods. 
In some cases, crime has gone down over 50 percent.
    Fourth, we will mount a coordinated effort to root out the 
conditions that breed and foster crime in our communities with 
an anti-graffiti campaign and renovating more abandoned 
properties.


                            FIRE DEPARTMENT


    In addition to crime fighting, we are going to insist that 
we support our dedicated firefighters who risk their lives to 
protect our homes and neighborhoods. This budget invests $7.5 
million to buy new pumper trucks, ladder trucks and rescue 
vehicles.
    You can never take all the risk out of being a firefighter, 
but you can and should invest in their safety. And that is why 
this budget commits $4.3 million to add a fifth firefighter to 
our fire trucks and a battalion aide, so that no fire team will 
go into action without the full complement and resources they 
need.


                          ECONOMIC DEVELOPMENT


    I go into my testimony in what we are doing in economic 
development, rehabilitating--for example, committing $21 
million over 3 years to demolish more than 1,000 units of 
vacant and abandoned housing, committing to home ownership, 
committing to boarding up houses that go toward abating 
nuisances and stabilizing our neighborhoods; and as well, a 
commitment in this budget, more than $7 million to acquire 
sites to relocate our District agencies in our neighborhoods.


                         RIGHT SIZE GOVERNMENT


    I believe as we right size our government, we can also make 
our government more accessible to our people, not only, as I 
will say in a second, through E-government, but making it more 
accessible out in our neighborhoods, which gets me to the point 
of government efficiency.
    I believe that the long-term salvation, redemption, 
recovery of our city is not only in the area of expanding our 
economy in the ways we have suggested, but also very, very 
importantly in bringing our costs of our government to size.
    I think that we have an excellent opportunity here, not 
only because the economy is going as well as it is, but because 
while the economy is going well and while we have the advantage 
of technology, we have the opportunity to take advantage of 
early buyouts, to take advantage of a fairly high attrition 
rate, to on a methodical, deliberate basis bring our government 
down to its right size without the kind of dislocation and 
displacement that is necessitated when you do things in the 
midst of a crisis. And we are committed and determined to doing 
that.


                       EQUIPMENT FOR PUBLIC WORKS


    First, we have invested in the Department of Public Works 
to move toward a gold standard, we are calling it, of customer 
service. We have committed $19 million for more equipment, 
including 10 garbage trucks, and 20 snow-ready dump trucks, so 
we can get the trash picked up on time regardless of weather.


                          IMPROVEMENTS AT DMV


    Second, we have increased staffing to reduce waiting times 
at DMV. I am pleased to say to this Committee and to our public 
that over the last month since we have made changes in our 
staffing and in our complement at DMV, with the support of the 
Council, no one in the inspection station in Southwest has 
waited over 20 minutes, not one person.
    Not one person going to renew their driver's license, renew 
their registration, has waited over 20 minutes over the last 
month. And that is definitely progress, as we count it in the 
District.


                        TECHNOLOGY IMPROVEMENTS


    Third, we have invested $55 million to improve technology 
and create a virtual E-government providing a wide range of 
online services. We are going to be announcing our goal to make 
the District the best E-government in the country in 2 years. I 
believe the march toward E-government is another opportunity we 
have to right size our government again without extraordinary 
dislocation and displacement of our employees.


                     MANAGEMENT SUPERVISORY SERVICE


    Fourth, we are going to be intensifying the implementation 
of the management supervisory service, which will establish 
performance requirements for key managers throughout our 
government. It will bring real accountability to the 
bureaucracy and make government more responsive.


                            RISK MANAGEMENT


    Finally, we are going to be working aggressively to improve 
our risk management. We still have areas of this government 
that are fantastically dysfunctional. Lives are at risk. Rather 
than waiting for the newspaper to tell us our marching orders, 
we need to be proactive and aggressive and get this done 
ourselves. We are committed to doing that in cooperation with 
our CFO, our I.G., and our program managers.


                              HEALTH CARE


    Finally, I want to talk about health and the commitment in 
this budget, $10 million to build and expand community based 
doctors' offices accessible to every home in the District.
    We believe that we can save money in healthcare by making 
this healthcare much more proactive and preventative, 
clinically based, primary as opposed to intensive in major 
institutions, in the emergency room.


                      RIDERS ON APPROPRIATION BILL


    As I have stated finally in the area of democracy, the 
District will, for the fourth straight year, enjoy a budget 
surplus. And despite this good news and proof that we can 
govern our city well, there is still the specter of riders to 
our appropriations bill.
    This year, I would hope that we can work with the Congress 
to allow our citizens to make their own decisions like other 
officials around the country do on a local level and use this 
budget and use the strategy that informs this budget to make 
our national Capital not only a model for children and 
families, not only a model for safe and prosperous 
neighborhoods, but a model to show that democracy can work at 
the epicenter of the free world.
    So I want to thank you, Madam Chairman, Senator Kyl and 
other members of the Committee for having us here today. And I 
would be happy to answer your questions at the end of the 
testimony.
    Senator Hutchison. Thank you, Mayor.
    [The statement follows:]

            Prepared Statement of Mayor Anthony A. Williams

    Chairman Hutchison, Senator Durbin and Members of the Subcommittee, 
thank you for the opportunity to testify before you today. It is indeed 
an honor and a privilege to share with the Subcommittee the District of 
Columbia's fiscal year 2001 budget.
    This budget builds upon the strong financial recovery achieved over 
recent years. The District will begin fiscal year 2001 having met the 
three financial goals set out by Congress. First, we will have balanced 
four consecutive budgets (those for fiscal year 1997 through fiscal 
year 2000), second, we will have gained full access to credit markets, 
and third, we will have established financial reserves totaling over 
$400 million.
    Now that we have stabilized our finances, the District government 
has tripled its efforts to enhance service delivery for residents and 
businesses. Although we still have much work to do in managing 
difficult areas such as procurement, and street repairs, and the long 
lines at the DMV, we are making tremendous strides every day, and will 
continue to demonstrate a strong track record of steady improvements. 
Most important among the improvements supported by our fiscal year 2001 
budget are those that support our children.

                               EDUCATION
    I am proud that the council approved my budget that was based on 
citizens' priorities, including full funding for our schools. As I said 
in my State of the District Address, this budget is an ``Education 
Budget.'' If we want to attract residents back to our city and ensure a 
future for our children, then we can settle for nothing less than the 
best education system of any big city in America. We have a long way to 
go, but we are making progress.
    That's why I am committing to full funding for the public schools--
an increase of $52 million for next year. This is the first time in 
over twenty years that a Mayor proposed a budget with the needed level 
of funding for our schools. I have balance the approach of full funding 
with accountability, which is the only way of ensuring that the funding 
reaches the classrooms where it belongs.
    With this investment, we will offer incentive pay to teachers who 
go the extra mile and provide another three percent pay raise for them, 
bringing our teachers' salaries more in line with neighboring 
jurisdictions because I recognize the vital role they play in our 
children's lives. The budget also includes funds to expand adult 
education at UDC, support the Homework Helpers Program and extend 
library hours.
    Even as we make a big investment in education, we also need to hold 
the school system accountable for those funds. That is why I support a 
smaller, stronger School Board of both elected and appointed members. 
Our citizens will vote on this proposal on June 27th. This is an 
opportunity to fix what's clearly broken.
    This budget also expands options for public school students and 
parents. To accommodate increased enrollment in charter schools, we 
committed $77 million next year to continue the reform effort. 
Currently, charter school enrollments are increasing year to year, but 
budgets are based on last year's enrollment. That means there's a one-
year lag between increased enrollment and an increased budget. Over the 
next year, I look forward to working with Members of Congress, our City 
Council and the community to correct this situation to ensure fair 
competition. Educating our children is a first step, but we also want 
them to live in safe communities. That's why the next priority I want 
to discuss is making our neighborhoods safe.

                           YOUTH INITIATIVES
    We also need to continue our commitment to provide quality 
activities before school, after school, on the weekends, and in the 
summers. As part of the Children Investment Trust, I included $10 
million in additional funding to provide programs during these out of 
school hours when our children are more likely to fall into trouble. 
Studies show that after-school programs reduce juvenile crime and raise 
academic performance, and it's time to give them the support they 
deserve and allow them to grow up and compete in the global economy.

                           TUITION ASSISTANCE
    To compete in this global economy it is imperative for our kids to 
continue their education beyond the 12th grade. The success of a Bill 
Gates is truly one in a billion. The rest of us need the opportunity to 
gain a college degree.
    To that end I want to thank the Congress for passing the District 
of Columbia College Access Act and, through it, appropriating money for 
the D.C. Tuition Assistance Grant Program. This wonderful new program 
will give many D.C. residents the opportunity to attend college for the 
first time.
    As you may know, the residents of every state in the union have a 
variety of low-cost public institutions to choose from. Thanks to the 
D.C. Tuition Assistance Grant Program, the residents of D.C. will now 
have the same choices as residents of other states.
    We face many challenges in setting up the D.C. Tuition Assistance 
Grant Program. We must design and build an administrative process that 
utilizes the latest technology. We must do it even as we administer the 
program. This is a costly undertaking. It is important to understand 
that administrative outlays in the first few years of the program will 
be greater than normal. That is why I have taken the step of investing 
District money into the program over and above the monies received from 
the Federal government for administration. We want to study and match 
the best practices of other state scholarship plans.
    An even more difficult challenge lies in letting our population 
know that now they have many low-cost, low-tuition choices for 
educating our children. Unfortunately, our young people have had too 
few choices for too many years. Too many of our African-American, 
Latino, and Asian youth have been deprived and alienated rather than 
assisted and praised. It has taken a massive public relations effort to 
let our young people know about this innovative program and convince 
them that now they do have a choice. We have also stepped in with 
District resources to help pay for this outreach.
    We are pleased at the way our young people have responded. Last 
week we received over 300 applications. We are finding that 95 percent 
of those who apply are eligible. The current rate of applications gives 
us great confidence that we will oversubscribe our predicted number of 
applications. Only 15 percent of the target population applied for The 
Pell Grant Program in its first year. In its second year, just 35 
percent of the potential applicants submitted an application. We are 
well on our way to doubling that second year figure--in our first year. 
We are confident that participation in the program will increase in 
each coming year.
    A large proportion of our graduating high school seniors as well as 
students attending eligible institutions will receive the D.C. Tuition 
Assistance Grant. Unfortunately, a large group of students, who 
otherwise would be eligible, have been left out. These are the District 
residents that will be seniors in college this Fall. A cut-off date of 
January 1, 1998, written into the legislation, results in most seniors 
being ineligible for the program. I am requesting that the Congress 
reconsider this cutoff. By moving it back to January 1, 1997, a whole 
class of students will become eligible. This will give us the ability 
to have a full cohort of students in the program in its first year. I 
am confident that we have the capacity to administer a full program, 
including our college seniors, this year.

                           SAFE NEIGHBORHOODS
    We've made some progress in the past year at reducing crime in our 
neighborhoods, but I will be the first one to tell you that we've got 
to do more. We need a budget that supports our men and women in 
uniform, and empowers citizens to reduce crime in their neighborhoods.
    For starters, the District committed $4.4 million to hire 175 more 
police officers and I'm going to continue to challenge the police, the 
prosecutors, and the courts to manage our resources efficiently and get 
more of our officers on the beat where we need them. Second, as part of 
MPD's budget, we will continue our gun buyback program, which collected 
almost 3,000 guns last year. Third, we will continue our Capital 
Communities initiative to shut down six open-air drug markets. We've 
already seen the benefits of community policing in those neighborhoods, 
and I want to take this strategy citywide. Fourth, we will mount a 
coordinated effort to root out the conditions that breed crime in our 
communities like an anti-graffiti campaign and renovating more 
abandoned properties.
    In addition to crime fighting, I will also insist that we support 
our dedicated firefighters who risk their lives to protect our homes 
and neighborhoods. This budget invests $7.5 million to buy new pumper 
trucks, ladder trucks, and rescue trucks. You can never take all the 
risk out being a firefighter, but you can and should invest in their 
safety. That's why this budget commits $4.3 million to add the fifth 
firefighter to our fire trucks and a battalion aide, so that no fire 
team will have to go into action with one arm tied behind their backs.

                        NEIGHBORHOOD DEVELOPMENT
    The next priority of this budget is economic development in our 
neighborhoods. In this budget, I committed $21 million over three years 
to demolish more than 1,000 units of vacant and abandoned housing 
throughout the city to make way for new homes. This budget also 
contains funds to hire 24 new housing inspectors to preserve our 
housing stock as well as an additional $2 million to support 
neighborhood cleaning efforts.
    Following through on a commitment I made last year, this budget 
contains more than $7 million to acquire sites to relocate District 
agencies to our neighborhoods. These new facilities will also provide 
retail space and spur neighborhood economic development just like the 
Reeves Center has done for U Street.

                         GOVERNMENT EFFICIENCY
    I also want to discuss our ongoing effort to improve services for 
residents. In the last year, we've made real progress, but much more 
remains to be done.
    First, we've invested in the Department of Public Works, to deliver 
that ``gold-standard'' of customer service. That is why this budget 
contains $19 million for more equipment, including 10 garbage trucks 
and 20 snow-ready dump trucks so we can get that trash picked up on 
time.
    Second, we have increased staffing to reduce waiting times at DMV. 
We have made some improvements at DMV, but we also face increased 
demand because more people are moving to the city.
    Third, we invested $55 million to improve technology and create a 
virtual ``e''government, providing a wide range of on-line government 
services.
    Fourth, we are intensifying the implementation of the Management 
Supervisory Service, which will establishes performance requirements 
for key managers across the government. MSS brings real accountability 
to the bureaucracy, and make government more responsive.
    Fifth, we are working to improve risk management. We still have 
areas of this government that are fantastically dysfunctional. Lives 
are at risk. Instead of constantly reacting to lawsuits and court 
orders, I want to proactively and systematically look into this 
government, find the problem areas, and root out the dysfunction before 
the next crisis comes along. In the process, I believe we will save 
taxpayers millions of dollars in legal settlement costs.

                              HEALTH CARE
    This budget provides $10 million to build and expand community-
based doctor's offices conveniently accessible to every home in the 
District. I also have a deep personal conviction that the government 
has an obligation to protect vulnerable citizens. To that goal, this 
budget will provide $1.4 million for 4 new senior wellness centers, 
expanded home care services, and job opportunities for seniors.
    This budget makes important strides in the areas of Lead Poisoning, 
HIV Tracking, clean water initiatives and full funding the Commission 
on Mental Health and Child and Family Services to bring receiverships 
back under my control.
 
                              DEMOCRACY
    As I have already stated, the District will, for the fourth 
straight year, enjoy a budget surplus. Despite this good news and proof 
that we can govern our city well, there is still the specter of anti-
democratic riders to the annual D.C. Appropriations bill. This year, we 
hope the Congress will allow District leaders to make their own 
decisions, just like other officials around the country make for their 
citizens. Over 90 percent of this budget is District taxpayer money.
    This year, I hope that the Congress will follow the President's 
lead and choose not impose these unnecessary riders on the DC 
Appropriations bill.
    Thank you for allowing me this opportunity to testify before you 
today. I will be glad to answer any questions you might have at this 
point.

    Senator Hutchison. First, I never did see her myself, but 
my staff tells me that Delegate Eleanor Holmes Norton is here 
and if she is, I would like to recognize her great work for the 
District.
    Thank you for being here.
    Senator Kyl, did you have any kind of statement, or did you 
just want to participate in questions?
    Senator Kyl. I just have a couple of questions.
    Senator Hutchison. All right.
    With that then, I will call on Ms. Cropp, our Council 
Chairman.

                      STATEMENT OF LINDA W. CROPP

    Ms. Cropp. Thank you very much Chairwoman Hutchison, 
Senator Kyl, members of the Senate Appropriations Subcommittee 
of the District of Columbia. I am pleased to be here with my 
colleagues to testify on the District's fiscal year 2001 
budget.
    Also in the chambers this morning is a Council colleague, 
David Catania, at-large member to the Council.
    Let me fast forward to next year and imagine another 
oversight hearing, except we will be celebrating that day for 
the following reasons: We would have balanced our budget for 
four straight years. We will, again, present to Congress 
another fiscally sound budget. The Financial Authority would 
disappear. And I think Dr. Rivlin and the members of the 
Authority will also be happy about that, because they will 
not----
    Senator Hutchison. I think they are celebrating that you 
will not be here, Dr. Rivlin. How does that make you feel?
    Dr. Rivlin. I think that is right.
    Ms. Cropp. And I think she will----
    Dr. Rivlin. And I am glad.
    Ms. Cropp. She will join us in that celebration. And that 
day would be a proud occasion for the District of Columbia 
government, because this is what we have been striving to 
accomplish, the Council, the Mayor and the Financial Authority 
during the past 3 or 4 years to become solvent financially and 
to end the control period.
    In this context, we are pleased and proud to present a good 
product for fiscal year 2001, a spending package that is 
fiscally disciplined, prudent and balanced.
    It includes more money for schools, police, health care, 
neighborhoods and a modest tax credit for some 54,000 low-
income families.

                        FISCAL YEAR 2001 BUDGET

    In this budget, the Council has set forth several goals for 
our city. We have joined with the Mayor in doing this, service 
improvement, fiscal discipline, strategic financial 
investments. It not only takes us closer to removing the 
Financial Authority and solvency; this budget continues to 
invest for the District and its future specifically and 
strategically in the following priorities: Clean and safe 
neighborhoods; tax reforms for working families; quality health 
care; economic and job growth; an effective education system 
with expanded funding; and improved customer service.
    During the past several weeks, the Council has worked 
diligently to reach agreement with the Mayor on various issues, 
funding critical needs, addressing freed-up appropriated funds 
from the reserve carryover--and we thank you very much, Madam 
Chair, for your help and your support in this particular area--
augmenting our revenue, expanding our investing--or investing 
tobacco funds, to producing a solid financial plan that will 
meet the needs of our citizens.
    In this process, we align the priorities of the Mayor and 
the Council to produce a budget that will move the City in the 
right direction and make it a much better place to live.

                   COUNCIL REPORTS ON BUDGET REQUEST

    I submit for the record a copy of the Council's Committee 
Report on the Budget Request Act, and I ask that it would be 
made a part of the record.
    Senator Hutchison. Yes.
    Ms. Cropp. In addition, if you have not received it, I will 
be submitting also, a copy of the Council's legislative agenda 
that will show you the direction that the Council is going 
during this legislative period.
    Senator Hutchison. Yes.
    [Clerk's note.--The Council of the District of Columbia 
report ``Bill 13-640, Fiscal Year 2001 Budget Request Act of 
2000'', can be found in the District of Columbia's subcommittee 
files.]
    Ms. Cropp. This final budget reflects the Mayor and the 
Council coming together. The result is a very good budget.
    When the Mayor submitted the budget to us on March 13, he 
had proposed a local budget of $3.1 billion, in addition to 
going into the reserve and tapping tobacco fundings amounting 
to $171 million.
    While we concurred with the Mayor that the District does 
need a budget that invests in critical services, educates our 
youth, funds health programs adequately, and cares for our 
elderly, our approach to this challenge was decidedly more 
cautious and even bordered on, as has been said, ``of excessive 
fiscal restraint.''
    Better yet, we assisted the Mayor, worked together with the 
Mayor in tackling these problem areas such as our schools, 
blighted neighborhoods, enhanced health services for the 
elderly, improved services for the underprivileged children and 
the mentally retarded within the core budget. And that was 
extremely important.
    Because we thought that these priorities were so important, 
our solution was to fund the priority areas in our core budget. 
We simply could not trust funding these priorities on a one-
time windfall source or revenues that could be beyond our 
control.
    We wanted to ensure the citizens that we met that, through 
direct and reliable funding, their needs were met. We wanted to 
eliminate the happenstance of underfunding in areas that might 
later require budget recuts to these programs.
    We resisted the tendency to just add on top of existing 
budgets. We found ways to selectively enhance revenue. We did 
all of these because as an oversight body, we have a duty not 
to waste the taxpayers' dollars.
    And prior to taking on these responsibilities, the Council 
and its 10 standing committees devoted many hours with our 
citizens and spent much time and effort in reviewing the 
agencies' performances at the budget and oversight hearings.
    At the end of the review process, we had conducted a total 
of 55 public hearings, where appropriate, incorporated the 
input from our citizens and workforce in putting this budget 
together.
    And that is what government is all about, the Executive 
proposing, the Legislative Branch working out with oversight 
hearings, and coming together with a good process.

                          $150 MILLION RESERVE

    At this point, Madam Chair, we want to thank you again for 
your action regarding the District's $150 million reserve. Your 
clarification that the unspent portion of this fund could be 
carried over to the next fiscal year has greatly boosted our 
efforts as we continue to rebuild, strengthen and revitalize 
this city.
    This enables the District to use its reserve like any other 
government. I have, at the beginning of my testimony, 
highlighted the Council's philosophy and our oversight of this 
budget--service improvement, fiscal discipline, strategic 
financial investments.
    Not only did we hold fast to these watchwords as we 
reviewed the budget, there are additional precautionary steps 
and insurance policies built into this list of reserve 
expenditures.

                       TIERS OF SPENDING RESERVE

    In agreeing with the Mayor, the spending of these funds 
will occur sequentially and be guided by several safeguards. 
The three tiers of spending: Trigger one includes $32 million 
for foster care receivership for the Lashawn receiver. These 
unspent portions that were carried over will free up local 
funds carried over and budgeted in the 2001 reserve. Only with 
certification by the CFO can these funds be spent.
    Trigger two has $37 million targeted for programs for our 
children, elderly, the Latino population, public safety, just 
to name a few.
    And trigger three contains $6 million to be allocated to 
the following: The police department, the Citizens Complaint 
Review Board, Human Resource Training and Settlement and 
Judgments.

                 $37 MILLION MANAGEMENT REFORM SAVINGS

    To safeguard further and to ensure trigger--spending 
triggers two and three, there are the insurance policies: The 
Mayor will achieve a $37 million management reform savings by 
downsizing the government as proposed in his budget.

                    OPERATIONAL IMPROVEMENT SAVINGS

    The Mayor will also achieve the $10 million in operational 
improvement savings by various methods; outsourcing, managed 
competition, private-public partnerships; and other savings 
reductions initially proposed in the Mayor's budget.

                          CERTIFICATION BY CFO

    The CFO will certify the carryover of the fiscal year 2000 
reserve, and the CFO will also certify that the collection of 
the additional revenues in fiscal year 2001 will be achieved. 
If, and only if, these conditions are met can the CFO certify 
the availability of funds.
    Any balance will be used for ``Paygo'' capital funds, 
instead of borrowing it, and if the CFO certifies that the 
balance is not required to replace funds expended in the fiscal 
year 2000 reserve.
    This journey is not an overnight miracle by any means. We 
have paid off our accumulated deficits. We have crafted five 
straight balanced budgets, and we will do no less in the years 
to come.
    We have obtained clean audits in the City's checkbooks 
since 1997. We continue to receive favorable investment bond 
ratings. We made legislative reductions in programs and 
personnel throughout the government. We imposed tight controls 
on spending.

                        FULL FUNDING FOR SCHOOLS

    We did not neglect our citizens, especially our young 
people. Schools, for the first time, have received full 
funding, which includes $2 million for universal pre-
kindergarten. And as many of us know, if we start out on the 
early side with our young people, that will certainly move them 
in a stronger position in later years. A cadet program for high 
school students will be implemented in the police department.

                     MORE FUNDING FOR PUBLIC WORKS

    We invested more money in public works, nuisance property 
abatement programs to make this city a better place to live. 
And those are the very basic issues, the quality of life issues 
that many of our citizens often talk about.

                        EXODUS FROM CITY SLOWING

    I think you will see a reflection of it in our population, 
in that the exodus from the City seems to be slowing down 
considerably.
    Finally, as you consider our appropriations request, we ask 
that you support and leave intact this budget, which has been 
mutually put together by the Council and the Mayor and the 
Financial Authority, with their approval.
    Even though the Financial Authority is still in place--and 
we thank them so very much for their service and their 
commitment--we, the elected representatives, felt that this 
budget should have been resolved by us. The Council and the 
Mayor worked together to present this budget.
    We cannot wait until year 2001 to celebrate the fruits of 
our labor, balanced budgets, unqualified audits, better tax 
collections, tight control on spending and most of all, the end 
of the control period. However, we intend to be vigilant in our 
oversight role as we continue to strengthen the financial 
health of the City.
    It is the Council's responsibility, even more so after the 
control period, to work with the Mayor, to produce responsible 
good budgets that invest dollars for the District and leave a 
legacy for future generations.
    The Mayor and the Council will continue to have public 
differences, debates and compromises. That is the nature of 
government.
    More importantly, we, the Mayor and the Council, shall 
continue to do what is necessary to have a strong financial 
structure and to improve service delivery.
    Thank you.
    Senator Hutchison. Thank you, Madam Chairman.
    [The statement follows:]

                  Prepared Statement of Linda W. Cropp

    Good morning/afternoon, Chairwoman Hutchison and members of the 
Senate Appropriations Subcommittee on the District of Columbia. I am 
pleased to be here with my colleagues to testify on the District's 
fiscal year 2001 budget.
                              INTRODUCTION
    Let me fast forward to next year--imagine another oversight 
hearing--EXCEPT we will be celebrating that day for the following 
reasons. We would have balanced our budgets four straight years. We 
will, again, present to Congress another fiscally sound budget. The 
Financial Authority would disappear. And that day would be a proud 
occasion for the District Government because that is what we have been 
striving to accomplish during the past three years, i.e., to become 
solvent financially and to end the control period. In this context, we 
are pleased and proud to present a good product for fiscal year 2001, a 
spending package that is fiscally disciplined, prudent, and balanced. 
It includes more money for schools, police, health care, neighborhoods, 
and a modest tax credit for some 54,000 low-income families.
    In this budget, the Council has set forth several goals for our 
city-service improvement, fiscal discipline, and strategic financial 
investments. It takes us closer to removing the Financial Authority, 
but it also continues to invest for the District and its future, 
specifically and strategically in the following priorities: Clean and 
safe neighborhoods; Tax reform for working families; Quality health 
care; Economic and job growth; Effective education system with expanded 
funding; and Improved customer service.

                    BUDGET AGREEMENT WITH THE MAYOR
    During the past several weeks, the Council has worked diligently to 
reach agreement with the Mayor on various issues, e.g., funding 
critical needs, addressing freed-up appropriated funds from the reserve 
carryover (we thank you for your help on this issue), augmenting our 
revenue, expending or investing tobacco funds, to producing a solid 
financial plan that will meet the needs of our citizens. In this 
process, we aligned the priorities of the Mayor and the Council and 
produced a budget that will move the city in the right direction and 
make it a better place to live. (I submit a copy of the Council's 
committee report on the Budget Request Act and I would ask that it be 
made part of the record.)

              COUNCIL'S REVIEW OF FISCAL YEAR 2001 BUDGET
    When the Mayor submitted the budget to us on March 13, he had 
proposed a local budget of $3.1 billion in addition to dipping into the 
reserve and tobacco funds amounting to $171 million. While we concurred 
with the Mayor that the District does need a budget that invests in 
critical services, educates our youth, funds health programs 
adequately, and cares for our elderly, our approach to this challenge 
was decidedly more cautious and, even bordered on ``excessive fiscal 
restraint''. Better yet, we assisted him in tackling those ``problem'' 
areas such as our schools, blighted neighborhoods, enhanced health 
services for the elderly, improved services for the underprivileged, 
children, and the mentally retarded within the core budget. And let me 
repeat this . . . within the core budget--and without using the reserve 
or the tobacco money--the Council did the hard work, scrubbed the 
numbers, made some tough decisions, and fixed many problems. We cut 
excessive growth in several administrative areas. We scrutinized the 
numbers, found savings within the schools transportation budget, and 
then fully funded the schools. This is in accordance with a suggestion 
by the Special Master for the special education programs when he 
testified that more savings could be made in the transportation budget. 
We gave an estimated $20 million to address the District's foster care 
system by leveraging federal Medicaid dollars for which the District is 
eligible. Additionally, $13 million was given to the Corrections 
Department and $3 million to the Mental Health Services, just to list a 
few. Had we not done this, these areas would have been underfunded!
    Because we felt that these priorities were so important, our 
solution was to fund them within the core budget. We simply could not 
trust funding these priorities by one-time, windfall sources of revenue 
beyond our control. We wanted to insure that citizen needs were met 
through direct and reliable funding. We wanted to eliminate the 
happenstance of underfunding in areas that might later require budget 
cuts to these programs. We resisted the tendency to just add on top of 
the existing budget. We found ways to selectively enhance revenue. We 
did all these because as an oversight body, we have a duty to not waste 
the taxpayer's dollars. And prior to taking on these responsibilities 
of ``fixing'' the budget, the Council and its ten standing committees 
devoted many hours of discussion with our citizens and spent much time 
and effort in reviewing the agencies' performances at the budget and 
oversight hearings. At the end of the review process, we had conducted 
a total of 55 public hearings and, where appropriate, incorporated the 
input from our citizens and workforce in putting this budget together.

       THE FREED-UP APPROPRIATED FUNDS FROM THE RESERVE CARRYOVER
    At this point, Madam Chair, we want to thank you again for your 
benign action regarding the District's $150 million reserve. Your 
clarification that the unspent portion of this fund could be carried 
over to the next fiscal year has greatly boosted our efforts as we 
continue to rebuild, strengthen, and revitalize the city. This enables 
the District to use its reserve like any other governments. I have, at 
the beginning of my testimony, highlighted the Council's philosophy in 
our oversight of this budget, i.e., service improvement, fiscal 
discipline, and strategic financial investments. Not only did we hold 
fast to these watchwords as we reviewed the budget, there are 
additional precautionary steps and ``insurance policy'' built into this 
list of reserve expenditures. In agreeing with the Mayor, the spending 
of these funds will occur sequentially AND be guided by several 
safeguards (I will elaborate on how fiscally cautious these safeguards 
are). The three tiers of spending are:
    (i) Trigger 1 includes $32 million for the foster care receiver 
Lashawn, Commission on Mental Health, DCPS, and the Mayor.\1\ The 
unspent portion from the fiscal year 2000 reserve, when carried over, 
will free up local funds currently budgeted in the fiscal year 2001 
reserve. Only with certification by the CFO, can then these funds be 
spent.
---------------------------------------------------------------------------
    \1\ The first trigger spending consists of $6.3 million for LaShawn 
Receiver, $13 million for Commission on Mental Health, $12 million for 
DCPS, and $0.6 million for the Mayor.
---------------------------------------------------------------------------
    (ii) Trigger 2 has $37 million targeted for programs for our 
children, elderly, the Latino population, and public safety, just to 
name a few.\2\
---------------------------------------------------------------------------
    \2\ The second trigger spending consists of $10 million for 
Children Investment Fund, $1.5 million for Department of Parks & 
Recreation, $1.3 million for Fire & Emergency Medical Services, 
$120,000 for Arts & Humanities, $400,000 for the Public Library, 
$574,000 for Aging, $3.3 million for Housing & Commission Development, 
$200,000 for Employment Services, $2.5 million for UDC, $4.1 million 
for Public Works, $4.2 million for Department of Health, $1.5 million 
for Latino Affairs, $2.5 million for Property Management, and $5 
million for the Cafeteria Plan.
---------------------------------------------------------------------------
    (iii) Trigger 3 contains $6 million to be allocated to the Police 
Department, the Citizen Complaint Review Board, the Human Resource 
Training, and Settlement and Judgements.
    To safeguard and further insure the spending Triggers 2 and 3, 
these are the ``insurance policies'':
  --The Mayor will achieve the $37 million in management reform savings 
        by downsizing the government as proposed in his budget;
  --The Mayor will achieve the $10 million in operational improvement 
        savings by various methods, i.e., outsourcing, managed 
        competition, public-private partnerships, etc., another savings 
        reduction initially proposed in his budget;
  --The CFO will certify the carryover of the fiscal year 2000 reserve 
        funds; and
  --The CFO will certify that collection of additional revenues in 
        fiscal year 2001 will be achieved.
    If, and only if these conditions are met, can the CFO certify the 
availability of funds. Any balance will be used for ``Paygo'' capital 
funds instead of borrowing, and if the CFO certifies that the balance 
is not required to replace funds expended in the fiscal year 2000 
reserve.
    These ``insurance policies'' are imperative because to the extent 
which the Mayor cannot achieve the savings, the $37 million will be 
used to replace the savings and not on the programs. Previously, this 
city had fallen into serious financial trouble by spending one-time 
infusions of money on ongoing programs and services. Since 1997, thanks 
in part to the Revitalization Plan that transferred, in fiscal year 
1998, various costly state-like functions from the District to the 
federal government and increased the federal Medicaid share from 50 
percent to 70 percent, the city has been on the road to fiscal 
solvency.
    This journey is not an overnight miracle by any means. We paid off 
our accumulated deficits. We crafted five straight balanced budgets and 
will do no less in years to come. We have obtained ``clean'' audits in 
the city's checkbook since 1997. We continued to receive favorable 
investment bond rating. We made legislated reductions in programs and 
personnel throughout the government. We imposed tight controls on 
spending. We did not neglect our citizens, especially our young people. 
Schools, for the first time, have received full funding, which includes 
$2 million for universal pre-kindergarten. A cadet program for high 
school students will be implemented in the Police Department. We 
invested more money in public works and nuisance property abatement 
programs to make this city a better place to live.

                               CONCLUSION
    Finally, as you consider our appropriations request, we ask that 
you support and leave intact this budget which has been mutually put 
together by the Council and the Mayor. Even though the Financial 
Authority is still in place and we thank them for their service and 
commitment, we, the elected representatives felt that the budget should 
be resolved by us. We cannot wait until year 2001 to celebrate the 
``fruits of our labor'', i.e., balanced budgets, unqualified audits, 
better tax collections, tight control on spending, and most all, end of 
the control period. However, we intend to be vigilant in our oversight 
role as we continue to strengthen the financial health of the city. It 
is the Council's responsibility--and even more so after the control 
period--to work with the Mayor to produce responsible good budgets that 
invest dollars for the District and leave a legacy for future 
generations. The Mayor and the Council will continue to have public 
differences, debates and compromises; that is the nature of government. 
More importantly, we, the Mayor and Council, shall continue to do what 
is necessary to have a strong financial structure and improve service 
delivery.

    Senator Hutchison. And now the Chairman of the control 
board. With everyone applauding your exit, I hope that you feel 
welcome here for your, hopefully, last meeting.

                     STATEMENT OF DR. ALICE RIVLIN

    Dr. Rivlin. I do, Madam Chairman.
    Chairman Cropp has already alluded to the situation that we 
might be in a year from now when it will, we very much hope, be 
clear that the control period is about to end on September 30, 
2001.

                         END OF CONTROL PERIOD

    But this 2001 budget already represents a milestone for the 
Authority. It is likely the last year that we will have to 
approve the budget and appear as participants in the budget 
process, and we consciously played a lower profile role this 
year for that reason.
    This budget is the result, as the Mayor and Chairman Cropp 
have pointed out, of direct negotiations between the Council 
and the Mayor in which we played largely an advisory role.
    So by next year, we hope we will be celebrating the end of 
the Control Period because we will have had four consecutive 
balanced budgets, the year 2000 being the last one which should 
be evident by, we hope, February 1, 2001.
    For the next 15 months until we actually fade into the 
sunset, the Authority will work very hard to support the Mayor 
and the Council in improving the management and the fiscal 
health of the District of Columbia, and to minimize the chance 
that the President will have to reactivate the Authority at any 
time in the near future.

                      SIX ITEMS NEED ACCOMPLISHING

    We believe that there has been much progress over the last 
several years in the District of Columbia, but that there is 
still serious work to be done. And I want to mention six 
priorities that we hope to be working very closely with the 
Mayor and the Council on accomplishing over the next 15 months.
    First, we believe that the budget process, while the 
outcome was good, revealed that both the Mayor and the Council 
need to strengthen their budget staffs. The Authority staff 
helped a good deal behind the scenes this year with the 
mechanics of getting the budget put together.
    The Mayor needs a stronger budget staff, and I know that 
the new chief financial officer, Natwar Gandhi, is working hard 
on this.
    And the Council does, too. I am not suggesting that they 
need a Congressional Budget Office, but they need a stronger 
staff, a kind of mini-Council budget office, to strengthen 
their ability to assess the impact of the Mayor's plans and to 
evaluate the proposals of the Council committees.
    Second, we all need to work hard to strengthen the 
financial management and information systems of the District 
especially, but not exclusively, cash management. The lateness 
of the 1999 audit revealed serious problems that need to be 
corrected, and we will be working with our strong new CFO to 
accomplish this over the next 15 months.

                          SCHOOL SYSTEM REFORM

    Third, the school system reform must be pushed ahead. We 
were all sorry to lose Ms. Ackerman as superintendent. We need 
to work together to keep up the momentum of the reforms that 
she started.
    I met yesterday with the advisory committee that we have 
appointed to help us choose a new superintendent, and they are 
working diligently on this. The good news is that there are 
several very good candidates to be considered.
    Whoever takes over as interim superintendent will need to 
take major steps both to improve the management functions of 
the school system--procurement, payroll, buildings, and other 
management functions, as well as to continue the progress 
toward accountability for academic results on which the Mayor 
has put emphasis.

SCHOOL PROBLEMS--SPECIAL EDUCATION, TRUANCY, WORKING RELATIONSHIP WITH 
                            CHARTER SCHOOLS

    And there are at least three really serious problems facing 
the school system. One is improvement of special education. 
Another is the reduction of truancy, which is a major problem 
in the District of Columbia. And the other, I think, is finding 
a good working relationship between the District of Columbia 
public schools and the charter schools. We need strong public 
and public charter schools with a good working relationship 
with each other.

                       PUBLIC BENEFIT CORPORATION

    Fourth, there is the problem of the Public Benefit 
Corporation. The audit revealed clearly what many of us knew, 
that the PBC is not solvent and that its financial management 
has been disastrous.
    The Mayor is proposing new members of the PBC board, and we 
hope the Council will act on them soon. In the meantime, the 
Authority is working closely with the Mayor and the Council in 
a collaborative relationship employing a consultant to help 
manage the hospital and reform the financial management 
immediately.
    The new board must work very closely with the City to 
define the role of the Public Benefit Corporation, and to make 
sure that it is managed efficiently.

                       UNIVERSITY OF THE DISTRICT

    Fifth is the University of the District of Columbia. While 
tuition assistance is a wonderful program for our D.C. 
students, we also need a strong, well-managed public university 
right here in the District of Columbia.
    Again, this year's audit revealed serious problems in the 
financial management of UDC. We have new board leadership 
there, too. We will work closely with them, with the Mayor and 
with the Council to define the role of UDC and to strengthen 
and build its usefulness to the District of Columbia.

                          ECONOMIC DEVELOPMENT

    And finally, we will all be working extremely hard on 
economic development. This is a high priority of the Mayor and 
the Council, and is the key to the future fiscal health the 
District of Columbia.
    This budget is a very good start in the right direction. We 
support it fully, and we are glad it is the last one that we 
will have to approve.
    Thank you.
    Senator Hutchison. Thank you, Dr. Rivlin.
    [The statement follows:]

                 Prepared Statement of Alice M. Rivlin

    Madame Chairman and Members of the Subcommittee: On behalf of my 
colleagues at the District of Columbia Financial Responsibility and 
Management Assistance Authority (``Authority''), I am pleased to 
present testimony on the fiscal year 2001 District of Columbia 
Financial Plan and Budget (``Budget''). I am delighted to represent the 
Authority on this panel with Mayor Williams, and Council Chair Cropp.
    This budget is the product of a consensus process. The process also 
reflects the Authority's effort to restore increasing levels of 
responsibility for this government's operations to local institutions. 
The fiscal year 2001 submission is the product of direct negotiations 
between the Mayor and the Council and reflects their shared vision of 
the future of this government and the community it serves. Confidence 
in the elected leadership of the District of Columbia continues to 
grow. As a result, the Authority's role in developing the fiscal year 
2001 Budget, although important, has been principally advisory.
    Under Public Law 104-8, this is likely to be the last Budget for 
the District of Columbia that this Authority will have to approve and 
send to Congress. We anticipate that the Comprehensive Annual Financial 
Report for fiscal year 2000, scheduled to be completed and delivered in 
February 2001, will indicate an operating surplus for the District.
    If so, that report will mark the fourth such operating surplus in a 
row. There have been no borrowings issued by the Authority, there are 
no borrowings to repay to the U.S. Treasury, and the District has 
regained access to the capital markets on reasonable terms and 
conditions. The statutory prerequisites for the Authority to begin its 
transition out of the control period are falling into place.
    The statute is clear that fiscal year 2001 is a Control Year, and 
the Authority is statutorily prohibited from suspending its activities 
during a Control Year, i.e., until September 30, 2001. However, our 
review of the 2002 Budget will be just that--review, not approval. The 
Authority suspends its activities if the statute is met. However, if 
any of the principal conditions that led to the financial crisis in 
1995 recur, legislative action to re-activate the Authority is not 
necessary. The President can do so simply by appointing new members.
    When the Authority was created in April of 1995 by an Act of 
Congress to assist the District in restoring financial solvency and 
improving management the District was: unable to pay its employees or 
its contractors; running a significant operating deficit; carrying a 
large accumulated deficit; and relying on the U.S. Treasury as the only 
source of funds. The District's ordinary services, such as motor 
vehicle inspections and building permits, were difficult to obtain, and 
the District could not sell its bonds at market rates.
    Five years later, the District is in much better shape, and the 
Authority's statutory role, as well as its relationship with the local 
elected leadership, has evolved.
    Many of the suggestions for management improvements recommended 
earlier in the control period are being implemented across many local 
government agencies. For example, at the Department of Consumer and 
Regulatory Affairs, businesses and homeowners are able to obtain and 
pay for building permits electronically. Broad financial successes 
include collecting substantially more in tax revenue than in previous 
years and turning projected deficits into surpluses in fiscal year 
1997, fiscal year 1998 and fiscal year 1999.
    Some of the best news for citizens is that the District's 
accounting practices for business tax receivables are much improved, 
and there is now a telephone information center to improve public 
outreach and communications with the Office of Tax and Revenue. 
Taxpayers in the District were issued tax refunds within 15 days during 
the 1999 tax-filing period.
    The days of an accumulated fund deficit are behind the District. 
That deficit drained reserves, hindered access to capital markets and 
adversely burdened the lives of every citizen and visitor to the 
nation's capital. As a result of turning its fiscal house around, the 
city and its citizens now enjoy an investment grade bond rating.
    Ensuring that the District institutionalizes adequate financial 
management systems is a prerequisite for future fiscal stability. 
Although delayed, the District of Columbia fiscal year 1999 
Comprehensive Annual Financial Report and Audit showed that the 
District is in sound financial health. Ending fiscal year 1999 with a 
substantial surplus, the District's General Fund balance grew by $85 
million to over $198 million. The District used an additional $35 
million of its surplus to reduce its debt burden.
    The delay in completing the financial report is troubling. More 
important are the problems that working through this process revealed. 
These serious problems must be addressed. The District's executive 
branch agencies, especially the Office of the Chief Financial Officer 
(OCFO), have much work to do to ensure that the books will be closed 
accurately and on time next year. The challenges involve a commitment 
to staff training, information system remediation, and strong 
management leadership.
    The OCFO must manage a process that fulfills a commitment to 
frequent reconciliation of the District's bank statements and cash--a 
significant challenge. The Authority is providing active support to 
this on-going effort involving the OCFO, the Office of the Mayor, the 
Council and the leadership of all other major District agencies. The 
solutions require strong central leadership, but they must be addressed 
throughout the decentralized financial management system.
    As you may know, the Authority on June 7, 2000 confirmed the 
nomination of Dr. Natwar M. Gandhi to fill the position of Chief 
Financial Officer of the District of Columbia. The Chief Financial 
Officer is a critical position that is within, yet independent of, the 
District Government. Dr. Gandhi is highly qualified to fill this vital 
position with 30 years of broad experience, in both the private and 
public sectors.
    He has diverse management experience leading and supervising large 
organizations and projects in business, academic and government 
settings. The Authority looks forward to working with him.
    Fiscal discipline is the first step toward a stable city in which 
both residents and visitors can be assured of receiving high quality 
public services. The fiscal year 2001 Budget is another important step 
along the path the District has traveled since 1995.
    The fiscal year 2001 Budget, which also includes out-year 
projections for fiscal year 2002 to 2004, shows a modest growth in 
total revenues and expenditures. The budget for fiscal year 2001 has 
revenues of $4.871 billion and expenditures of $4.867 billion, a modest 
surplus. It also reflects significant tax cuts geared to stimulate the 
District's economy.
    The plan foresees an accumulated fund balance of $260 to $270 
million. In fact, the fiscal year 2001 Budget will also benefit from 
the anticipated budget surplus in the current fiscal year of an 
estimated $57 million. Mayor Williams and Chairman Cropp will speak to 
the budget in more detail, but I would like to highlight certain areas 
of the budget that may be of particular interest.
    As you know, Section 148 of the General Provisions of the fiscal 
year 2000 Appropriations Act requires that the District budget a $150 
million reserve at the beginning of each fiscal year. This budget and 
financial plan provides sufficient budget authority to ensure that the 
statutory reserve requirement is fulfilled for fiscal year 2001. Madame 
Chairman, Section 148 has been the source of some confusion. Your 
assistance in clarifying Congressional intent with respect to both the 
funding for the reserve and its uses has been welcome. The 
Appropriations process will provide an opportunity to explore these 
alternative concepts of the reserve fund.
    The tobacco settlement proceeds are expected to yield significant 
revenues. Those payments, however, are not guaranteed future sources of 
revenue, and therefore should not be used to support general 
governmental operations. The District is wisely segregating these 
proceeds, expected to range up to $61 million over several years, from 
its general fund. The District will establish a non-lapsing independent 
trust fund to manage these resources. This measure will ensure that the 
District does not become too reliant upon an uncertain revenue stream 
to support vital general government operations and services.
    Reforming the District's tax system in order to provide balance and 
equity has been a high priority for local elected leadership. The 
District began this effort with the fiscal year 2000 Budget, which 
included significant tax reductions and restructuring. The fiscal year 
2001 Budget continues these efforts with a plan to enact an earned 
income tax credit for low income working families valued at 
approximately $3.9 million in taxes.
    Madame Chairman, as you know, the fiscal year 2000 Budget for the 
District of Columbia Public School System was the result of a 
compromise intended to balance the funding requirements for children 
throughout the system, including those attending public charter 
schools. Actual attendance for both traditional and charter public 
schools increased in the current year. The number of charter school 
students is projected to increase from approximately 7,000 this year to 
nearly 12,000 students for fiscal year 2001.
    As you also know, the District has made significant progress in 
eliminating the backlog of student assessments needed to determine 
eligibility for special education services. Reducing the backlog has 
resulted in a higher number of placements for children requiring 
special education services in the current year. These two factors alone 
resulted in a major shortfall in education funding for fiscal year 
2000.
    Fully funding schools is a critically important commitment for 
fiscal year 2001. Mayor Williams and the Council made difficult choices 
in a mutual effort to ensure that the budget before the Subcommittee 
fully funds educational services for all students in fiscal year 2001.
    Before concluding, Madame Chairman, it is important to raise the 
question of the structural challenges to the District Government. The 
District has benefited from the Revitalization Act, as well as the 
economic expansion. It will also continue to benefit from the fact that 
a heavy concentration of services and public sector employment in this 
region can provide marginal insulation from the worst effects of an 
economic turndown. However, persistent structural deficiencies will 
continue to imperil this community's fiscal health until they are 
adequately addressed.
    A significant number of District residents, for example, remain 
eligible and entitled to public assistance, despite the record length 
of the national economic expansion. Those numbers, along with program 
costs, will only grow in a turndown.
    Another clear concern is the District's exceptionally narrow tax 
base. Appropriate efforts to reduce the tax burden on residents and to 
compete with regional rivals for business development opportunities are 
beginning. These important initiatives must be balanced, however, 
against the necessity for generating sufficient revenues to support 
public services.
    Economic development is one answer, and it is among the District's 
highest priorities. Economic development is also a priority for the 
Congress, as made clear from its support of the Infrastructure Fund and 
the National Capital Revitalization Corporation. The Authority believes 
that a strong, growing economy in the District is essential, not only 
to the fiscal health of the city, but to the economic prosperity of the 
whole Washington region.
    Many of the District's structural deficiencies are the result of 
its unique relationship with the national government and with 
surrounding jurisdictions. As the Authority begins to work with the 
Congress to enact the fiscal year 2001 Budget, the transition to local 
governance also continues.
    Before it phases out its activities, the Authority plans to develop 
and to share with local elected leaders, the public and the Congress 
recommendations for structural reform.
    As noted earlier, the role of the Authority has evolved, and its 
membership has also changed. In closing, it is appropriate that 
individual contributions by those who have participated in this process 
be recognized. There have been many. Among them is my predecessor, 
Andrew F. Brimmer, and his colleagues who volunteered their time and 
energy when confidence in local governmental institutions was at its 
lowest ebb. My colleagues on the current Authority Board, Constance B. 
Newman, Robert P. Watkins, Eugene Kinlow, and Darius Mans, have been 
unswervingly committed, hard working, and helpful to this community and 
its elected and appointed leadership. We greatly regret that 
reassignment at the World Bank has made it necessary for Dr. Mans to 
resign from the Authority effective July 1, 2000. He has made 
extraordinary contributions to our work and will be greatly missed.
    Your personal interest, Madame Chairman, in securing the District's 
financial health has been an important factor in the vastly improved 
evaluation of the District's creditworthiness.
    In partnership with Mayor Williams, Chairman Cropp, and the 
Council, the Authority has worked very hard to fulfill a commitment to 
ensure a timely return to local governance. There is plentiful evidence 
of a sense of renewal, including the rebounding residential real estate 
market and downtown construction activity. The best evidence, however, 
is the heightened attention to educating this city's children.
    The Authority appreciates the cooperation and support provided by 
the Appropriations Committee since the fiscal year 2000 budget was 
enacted. Approval of the fiscal year 2001 Budget and Financial Plan 
will also aid in maintaining financial stability, further improvement 
in the delivery of public services, and the return of normal 
governance. We look forward to working with the Congress in the weeks 
ahead to secure passage of this budget.
    In conclusion, Madame Chair, much progress has been made in 
Washington. The fiscal health of the District has improved. Delivery of 
primary services is also improved. However, there is much work still to 
be done before the citizens receive modern, efficient government. The 
Authority's work during the next, and I add, our last year of activity, 
will be to support the Mayor and the Council in making further progress 
in the District. Chief among the issues that must still be addressed is 
the effort to expand the District's economic foundation. Without a 
broad economic base on which to build, this city cannot sustain its 
recovery, and will begin to suffer financial peril. I strongly urge you 
and your colleagues in the Senate, and the House of Representatives to 
assist the City's elected leadership with the necessary resources and 
support to continue the revitalization of this great City.
    This concludes my testimony, Madame Chairman. I will be happy to 
respond to any questions.

                     FINANCIAL MANAGEMENT POLICIES

    Senator Hutchison. I was very interested in your six 
points. The one point I am going to ask you to look at in 
addition to the points you have raised is: Particularly, I 
think, in the next year you could be very helpful on the 
financial management policies, which you mentioned is an area 
that needs attention----
    Dr. Rivlin. Yes.
    Senator Hutchison [continuing]. And the debt policy.
    Dr. Rivlin. Debt policy, yes.
    Senator Hutchison. I see no cloud on the horizon for the 
District except the debt situation, and so that is something I 
would highlight.
    Mayor Williams.

                              DEBT POLICY

    Mayor Williams. I am not sure that we are--and I could get 
for you, Senator, the exact figures. I know that as part of 
last year's budget, we restructured a lot of debt to take the 
top off this huge debt mountain. And you are right, to reduce 
some short-term costs, we have got longer term burden.

                             TOBACCO FUNDS

    But I think there is a clear consensus between the Mayor 
and the Council, and I believe the board as well, that we 
should take our tobacco funds, the stream of the tobacco 
payments, securitize these tobacco payments, and in the first 
instance use the securitized funds. In other words, we are 
paying for this by the stream of tobacco money, not revenue 
from District taxpayers--take this chunk of money, to use a 
technical phrase, and pay down a huge amount of District debt. 
And I have not heard anyone talking about it.
    I certainly am not contemplating using that increased 
capacity to borrow more, but using that reduced debt service to 
make a balance between investments in our future and programs 
for our people. So I think that is very good fiscal discipline.
    Senator Hutchison. Well, the only concern I have about the 
proposal as I understand it, to securitize the tobacco 
payments, is that you are planning to do it 100 percent.
    I would be skeptical of securitizing 100 percent. I think 
some States and some cities will do maybe 25 percent 
anticipation of that revenue stream, but 100 percent, I think 
could get you out on a limb.
    So I hope, as you are going down the road, you might look 
at something less than 100 percent and just be cautious, 
because a number of States are already beginning to see a 
lowering of the estimates on that over the long term, because 
tobacco smoking is going down.
    Dr. Rivlin. Excuse me. Is that not a reason for the 
securitization though? It is a take-the-money-now, rather than 
take the chance that the tobacco companies will continue making 
profits.
    Senator Hutchison. Are you talking about taking the money 
now, or are you talking about borrowing against the anticipated 
revenue?
    Dr. Rivlin. No. I am----
    Mayor Williams. Well, the company would take the risk. I 
mean, we essentially would get a reduced or present value 
amount; and whoever has done the securitization, it is up to 
them to work with the tobacco companies and get this stream of 
payments.
    Dr. Rivlin. It is shifting the risk off the District of 
Columbia.
    Ms. Cropp. One of the reasons that New York, for example, 
only did about 25 percent was because the amount of tobacco 
dollars that they would receive was much greater than what the 
District would receive. In fact, it would probably flood the 
market and would not have enabled them to get that much money 
back, because it would just be too much out there at one time.
    But in doing this, it would really reduce the risk for the 
District of Columbia. If, in fact, we did not then use the 
tobacco dollars to pay down the debt, it would then cost us 
more, because then it would not be tax-free. And doing it this 
way, you get some tax benefits from it, from dealing with it 
this way.
    Now, whether or not we pay down the debt, even if we 
securitize, is a decision that we would make, but it is more 
beneficial for us to make it, because it would cost us less 
money because of the tax credits that we would get.
    But this reduces the risk for us. When we looked into this 
issue, for example, many financial advisers have felt that the 
securitization was the best approach to go.
    And one of the reasons was that by not securitizing, what 
we would in essence be doing is putting all of our dollars into 
tobacco. And very few people at this point would take all of 
their investment money and put every penny of their investment 
money into tobacco.
    By securitizing it, it gives us an opportunity to put the 
money into a more diversified portfolio, whatever we decide 
that it is going to be.
    And in addition to that, by getting the money up front, we 
tend to get the present value of the dollars that would be 
available to us; and then taking the present value of it, 
investing so that, in future years, it would still be more.
    So after looking at it, it really took an awful lot to look 
at this issue and try to decide which approach would be better, 
but I think that the tobacco companies, as we sit here right 
now, are trying to figure out approaches and ways to keep 
cities and States from getting these dollars.
    They do not want to give the dollars out, and whether it is 
more off-shore or whatever, they may try to keep us from 
getting it. And by us doing the securitization, it seems to me 
that it is less risk for us. It is better for us to get in here 
early than for other people to come in later.
    Senator Hutchison. I would like to see more on this to 
determine the risk factor and what you would be giving up. And 
I will ask to perhaps meet with the chief financial officer on 
that issue as well.
    I am going to call on Senator Kyl. I have a number of 
questions, but I plan to stay for those, so why do I not call 
on you? And then I will follow up.
    Senator Kyl. Thank you very much, Madam Chairman. I have 
three issues really.

                            CHARTER SCHOOLS

    First of all, Dr. Rivlin, one of the six items you 
mentioned was the need for a strong working relationship 
between the traditional and charter schools; and I noted in the 
Mayor's testimony the commitment of the $77 million for charter 
schools, which I applaud. I think that is very important for 
both the traditional and the charter schools.
    But to what do you refer when you recommend a more close 
working relationship? Why is that important? What are you 
talking about?
    Dr. Rivlin. Well, I think, over the last couple of years, a 
rather adversarial relationship has developed between the 
charter schools and the D.C. public schools.
    It has been partly a tone question, but it has been very 
real and very worrisome and I think the fault was on both 
sides, that the public school system, not surprisingly, saw the 
charters as a threat. And the charters believed that the public 
school system was trying to keep them from flourishing.
    I believe that there is a strong mutual interest in both 
systems flourishing, and that there can be, not only a good 
friendly relationship without taking potshots at each other, 
but actual cooperation in the use of some kinds of facilities 
or special kinds of things that can be dealt with on a mutual 
basis.
    Senator Kyl. Good. I agree with you. And I think that is so 
important. In Arizona, we have about a third of the charter 
schools in the country. We have really led in that. And where 
there has been cooperation, it has been mutually beneficial.
    For example, one of our largest school districts, public 
school districts, was losing a lot of students to charter 
schools. The superintendent began visiting those charter 
schools to try to figure out what they were doing right and 
what he was doing wrong.
    And there were some things which he could adapt to the more 
traditional schools, which he did, and began publicly 
advertising for students to come back to the traditional 
schools, and many of them did.
    And the competition, though friendly, aided both. I hope 
that that kind of relationship and synergy continues to exist. 
I applaud the Mayor for making that kind of commitment.

                           BRIANNA BLACKMOND

    Mayor, I think everyone in this room and the City was 
outraged and just disappointed and distressed at the death of 
young Brianna Blackmond. I noted that last year, we 
appropriated $5 million to the District for a program for 
adoptive incentives for foster children. I am pleased to see 
the Administration included another $5 million in the program 
for this year.

                        $5 MILLION FOR ADOPTIONS

    You have taken a special interest in this, I understand, 
not only in this case but in foster care generally. I wonder if 
you could tell the Committee how the $5 million has been spent 
and how you would anticipate working that program this year.
    Mayor Williams. I can get you the exact details as a follow 
up, Senator, but in general what we are trying to do is reduce 
the number of children in foster care in the District by 
increasing the number of adoptions, as well as increase the 
number of children who are cared for within our borders as 
opposed to outside of the City, because both numbers are very, 
very high.
    And we have got a situation right now where we have 1,000 
youth in foster care who are essentially teenagers, and as they 
graduate to youths--a kind of perverse term--from foster care, 
unless something is done, they will not have a home.
    So our first order of business was to leverage these 
dollars to remove as many barriers as possible to expedite, 
however possible, within the government the process of 
adoption, so that families knew that this was a priority. They 
knew that there was going to be the outreach. They knew that 
there was going to be the assistance from the government so 
that they were able to adopt these children.

                               ADOPTIONS

    I am pleased to report--I do not have the exact figure 
before me. But I am pleased to report that because of these 
efforts, for example, working with the Council's Office to 
remove some of the regulatory thicket is just one example that 
the number of adoptions actually is beginning to go up. And we 
hope to accelerate that.
    [The information follows:]

      Letter From the Subcommittee on the Adoption Incentives Plan

                                                 February 24, 2000.
The Honorable Anthony Williams,
Mayor,
District of Columbia, Washington, DC.
    Dear Mayor Williams: Enclosed for your review and approval is a 
proposal for the use of federal adoption incentive funds for the 
District of Columbia that has been developed at your request by the 
Mayor's Advisory Committee on Permanent Homes for Children.

                               BACKGROUND
    As part of the consolidated Appropriations Act of 2000, the 
Congress authorized a federal payment for incentives for adoption of 
children in the District of Columbia. As outlined in the conference 
report:
  --The Act authorizes a one-time federal payment of $5 million to 
        create incentives to promote adoption.
  --Funds under this authorization must be used by September 30, 2001.
  --A program must be established by the Mayor and the District Council 
        and approved by the Appropriations Committees of House and 
        Senate.
  --The funds may be used for tax credits to offset costs incurred by 
        individuals in adopting (requires legislation).
  --The funds may be used to provide for health care needs of such 
        children (requires legislation).
    At its December meeting, the Mayor's Advisory Committee on 
Permanent Homes for Children established a subcommittee composed of 
Toni Oliver, Judith Meltzer, Mae Best, Phyllis Langston, Gwen Menefee 
and Liz Siegel and asked them to propose a plan for use of the federal 
funds.
    The Committee has gathered ideas on adoption needs and resources 
from others in the community; reviewed ideas for adoption incentives 
from other Jurisdictions, and researched the feasibility and costs of 
proposals that surfaced. A draft plan was shared with the full Advisory 
Committee in early January and comments and suggestions for change were 
solicited. The Committee reviewed all written and verbal comments and 
revised the plan accordingly.

                            PROVOSAL SUMMARY
    As a result of this work, the Committee is proposing that the 
federal adoption funds be focused on the overarching goal of providing 
loving and permanent homes for the District's children in the District 
of Columbia. The overall plan for the incentive funds is targeted 
toward five measurable outcomes:
    Outcome # 1.--Increase the number of families in the District of 
Columbia who are willing and able to adopt children currently in the 
District's foster care system.
    Outcome # 2.--Decrease the disruption rate for adoptions of 
children with special physical or emotional needs.
    Outcome # 3.--Increase the rate of adoption of teens in foster care 
whose permanency plan is adoption.
    Outcome # 4.--Increase the rate of adoption for sibling groups in 
foster care whose permanency plan is adoption.
    Outcome # 5.--Achieve compliance with the outcomes for permanency 
for children specified by the federal government under the Adoption and 
Safe Families Act (ASFA).
    The proposal which follows includes four interrelated initiatives 
that together total $5 million to be spent between now and September 
30, 2001. The majority of funds would be contracted out to private 
organizations to conduct the work. The four initiatives include:
  --Creation of a Flexible Fund to support adoptions of sibling groups 
        and other hard to place children.
  --Establishment of a Scholarship Fund to support transition to 
        independence for adopted teens.
  --Creation of an Adoption Resource Center(s) and Post-Adoption 
        Services Capacity.
  --Enhancement of recruitment and support of District foster and 
        adoptive families.
    A fuller description of each of the proposed initiatives and 
estimated costs based on two years of implementation is presented in 
the attached proposal.
    plan for management and oversight of the adoption incentive plan
    The Committee proposes that overall management of the initiative 
will be the responsibility of the Deputy Mayor for Children's Services 
but that day to day coordination and implementation of the adoption 
incentive initiatives be assigned to the Child and Family Services 
Administration which is the agency responsible under District law for 
the work associated with providing permanent homes for children who are 
in the custody of the District of Columbia because of parental abuse or 
neglect. Several of the initiatives would involve one or more contracts 
with private organizations to carry cut the work. CFSA would be 
accountable to the Deputy Mayor for Children and Families far 
reporting, evaluation and fiscal accountability an each initiative. 
General oversight of the Adoptive Incentive Plan would also be provided 
by a standing subcommittee of the Mayor's Advisory Committee on 
Permanent Homes for Children. Regular reports would be made to the 
Committee on progress in meeting measurable objectives. In addition, 
the plan includes a provision for a small amount of funds to be set-
aside for an external evaluation of the effectiveness of the proposed 
adoption incentive initiative. A contract would be let with an 
independent external evaluator to design and conduct necessary data 
collection and evaluative studies under the direction of the Mayor's 
Committee and/or the Deputy Mayor for Children's Services.

                               NEXT STEPS
    Under the terms of the authorizing legislation, the plan for the 
use of these funds must be approved by the Mayor and the District 
Council and then approved by the Appropriations Committees of the House 
and the Senate. We are hopeful that you will approve the proposed plan 
and take the lead in forwarding it to the District Council for their 
approval. Members of the Mayor's Advisory Committee would be glad to 
assist your staff in making any necessary presentations on the 
proposals in order to secure Council approval.
    Once District Council approval is obtained, the Advisory Committee 
would again be willing to work with you and your staff in presenting 
the plans to the Congressional Appropriations Committees in hopes that 
their quick approval can be obtained.
    On behalf of the Mayor's Committee, we hope that the work necessary 
to translate this proposal to reality can occur expeditiously. There 
are far too many waiting children in the District of Columbia. We stand 
ready to assist you in any way possible.
            Sincerely,
                                   Mae Best,
                                   Phyllis Langston,
                                   Gwendolyn Menefee,
                                   Judith Meltzer,
                                   Toni Oliver,
                                   Elizabeth Siegel,
                      Subcommittee on the Adoption Incentives Plan.

        PROPOSAL FOR USE OF THE FEDERAL ADOPTION INCENTIVE FUNDS
                               BACKGROUND
    As part of the consolidated Appropriations Act of 2000, the 
Congress authorized a federal payment for incentives for the adoption 
of children in the District of Columbia. The Act authorizes a one-time 
federal payment for $5 million to create incentives to promote 
adoption. As outlined in the conference report, a program for the use 
of these funds must be established by the Mayor and the District 
Council and approved by the Appropriations Committees of the House and 
the Senate. The funds under this authorization must be used by Sept. 
30, 2001.
    In authorizing this fund, the Congress was responding to the large 
numbers of children in foster care in the District of Columbia with a 
permanency goal of adoption. As of December 31, 1999, approximately 
one-third of the District's 3,000 children in foster care were not 
expected to return home and had a permanency goal of adoption. While 
many of these children are likely to be adopted by their foster 
parents, there are hundreds of children for whom families need to be 
identified and supported to pursue adoption. The District of Columbia 
has demonstrated its commitment to improving the lives of children 
through adoption and has increased the numbers of adoption of children 
in foster care by 191 percent from 1995 to 1999. A record number of 250 
adoptions were finalized in 1999; this is a good start but much more 
remains to be accomplished.
    In designing a plan for the use of the federal adoption incentive 
funds, a subcommittee of the Mayor's Advisory Committee on Permanent 
Homes for Children sought input from many in the community and 
researched innovative ideas from the region and around the country. The 
goal was to design a series of initiatives that would pilot-test new 
approaches to address issues that have been barriers to adoption and to 
focus these funds in a way that will achieve measurable outcomes.
    The overarching goal of the attached proposal is to provide loving 
and permanent homes for children in the District of Columbia. The Plan 
is designed to achieve the following five measurable outcomes:
    Outcome # 1.--Increase the number of families in the District of 
Columbia who are willing and able to adopt children currently in the 
District's foster care system.
    Outcome # 2.--Decrease the disruption rate for adoptions of 
children with special physical or emotional needs.
    Outcome # 3.--Increase the rate of adoption of teens in foster care 
whose permanency plan is adoption.
    Outcome # 4.--Increase the rate of adoption for sibling groups in 
foster care whose permanency plan is adoption.
    Outcome # 5.--Achieve compliance with the outcomes for permanency 
for children specified by the federal government under the Adoption and 
Safe Families Act (ASFA).
    The proposal includes four interrelated initiatives:
  --Creation of a Flexible Fund to support adoptions of sibling groups 
        and other hard to place children.
  --Establishment of a Scholarship Fund to support transition to 
        independence for adopted teens.
  --Creation of an Adoption Resource Center(s) and Post-Adoption 
        Services Capacity.
  --Enhancement of recruitment and support of District foster and 
        adoptive families.
    Each of the proposed initiatives' and estimated costs based on two 
years of implementation is presented below.

                             PROPOSED PLAN
Creation of a Flexible fund to support adoptions of sibling groups and 
        other hard to place children.
    Problem addressed.--Many parents who would be willing and are 
capable of becoming adopted parents are discouraged from doing so 
because of their inability to meet certain requirements related to 
physical space, conditions in their home, or the need for 
accommodations or special equipment for children with handicaps or 
large sibling groups. Access to a funding source for some of these 
needs would provide a significant incentive toward adoption.
    Proposal.--A flexible fund would be established which could be 
accessed by families interested in adoption in order to provide needed 
funding and/or resources for a range of activities/items necessary to 
become an adoptive parent. The kinds of things eligible for 
reimbursement/payment through this fund would include:
  --home renovations to accommodate wheelchairs or other special needs 
        of children;
  --assistance in lead paint abatement when the presence of lead paint 
        is an obstacle to approval of the adoptive home;
  --assistance in paying the cost of FBI finger-printing necessary for 
        approval as an adoptive parent;
  --equipment to care for disabled children (e.g., beds, durable 
        medical equipment (and specialized items not covered by other 
        public programs);
  --assistance to needy families who have uncovered costs related to 
        mental health care for children with special needs. Funds would 
        be administered only to families with demonstrated financial 
        need according to a sliding scale;
  --purchase of a wheelchair equipped van to enable adoptive parent(s) 
        to accept children with physical handicaps;
  --assistance with home renovations, down payments or purchase of 
        homes to allow families to adopt large sibling groups. 
        Consideration will be given to purchase of homes for sibling 
        groups of five or more;
  --assistance with miscellaneous expenses in accordance with a plan 
        approved by the agency to promote the ability and willingness 
        of parents to adopt children with special needs or large 
        sibling groups;
  --other approved expenses to promote adoption and avoid disruptions 
        for which no other funding source exists.
    Families would be eligible for funds from this account if they have 
applied and are approved to be adoptive parents and have adoptions 
finalized after January 2000. Funds from the flexible fund account will 
be authorized only for things not available without cost in the 
community and not routinely covered by the existing adoption subsidy 
program. Funds will be used primarily for one-time expenditures for 
things that are a clear barrier to adoption. The funds would be placed 
in an interest-bearing account.
    Estimated Cost.--$1.7 million ($850,000 per year for 2 years).
Establishment of a Scholarship fund to support transition to 
        independence for adopted teens.
    Problem.--One of the major barriers to adoption of school age and 
teenage children is the lack of resources for adoptive parents to 
support education and training of a transition to independence.
    Proposal.--A scholarship fund would be established which could be 
accessed by adoptive families for post high school education and 
training for their adopted children upon presentation of documentation 
of acceptance at a Junior College, university or post-secondary 
occupational or training school, adoptive families would be eligible to 
receive a scholarship of up to $8,000 per year for a high school 
graduate going to college and up to $3,000 per year for high school 
graduates entering post-secondary training. This fund could be 
established by placing an earmarked amount per child in an interest 
earning account at the time of the child's adoption. The scholarship 
fund would be administered through a private non-profit organization.
    Estimated Cost.--The fund would be established initially with $1.5 
million in an interest bearing account. Cost assumptions are based on 
granting up to 130 scholarships for two years. Interest generated by 
the fund and additional fundraising would occur to stabilize the fund 
for the future.
Creation of an Adoption Resource Center(s) and Post-Adoption Services 
        Capacity.
    Problem.--One barrier to adoption is the fear of prospective 
adoptive parents that they will not be supported when and if problems 
arise. Experience around the country has shown that the development of 
adequate post-adoption support resources is a significant incentive to 
adoption.
    Proposal.--Funds would be used to establish a private Adoptive 
Family Resource Support Center in the District of Columbia to provide 
ongoing information, education and support to adoptive families. Some 
of the activities to be carried out by the resource center will 
include: operation of a hotline for questions, information and 
referral; development and dissemination of and information and referral 
directory of services and supports in the metropolitan area; creation 
and operation of a resource lending library for adoptive parents and 
children; conduct of training programs developed in concert with 
adoptive parents to meet their needs; development and assistance to 
adoptive parent support groups, etc., and therapeutic services related 
to adoption. The Support Center would also have funds to provide 
scholarships for adoptive children and families to participate in 
training provided by national or regional support groups or 
associations.
    The Committee proposes that an RFP be developed outlining the 
Adoption Resource and Support activities that are desired and that an 
organization be funded to develop those activities for the District, 
either by creating a single resource center or by developing and 
coordinating programming that could be made available through or in 
cooperation with the neighborhood family support centers proposed in 
the Mayor's Safe Passages initiative.
    As an adjunct to the Support Center(s), it is also proposed that a 
small portion of the funds be allocated to CFSA to enhance their post-
adoption services capacity and to enable their staff to link families 
with the Resource Center and other adoptive support opportunities 
family conferences, training, etc.).
    Estimated Cost.--$900,000 million (Resource Center $775,000 for 2 
years and $125,000 for CFSA post-adoption support activities for 
families).
Enhancement of Recruitment and Support of Foster and Adoptive Families
    Problem.--The majority of adoptive families begin as foster 
parents. Expanding the pool of adoptive families means expanding the 
recruitment and support of foster parents as well as doing more 
community and neighborhood recruitment of adoptive families. CFSA has 
been hampered in its efforts to expand its recruitment and support 
activities by a lack of funds to support the start that is doing 
recruitment and to enable CFSA to use foster and adoptive parents as 
team members in the recruitment process.
    Proposal.--Funds would be used to contract with community 
organizations and providers to assist in adoptive home recruitment. 
Part of the incentive plan also involves providing funds to support 
critical staff enhancements and activities within the Adoptions Unit of 
CFSA. Funds would be made available to provide for additional capacity 
both within CFSA and in other organizations to expand after hour's 
recruitment activities and to make it possible for foster and adoptive 
parents to serve as co-leaders in training. As part of the enhanced 
recruitment effort, incentive funds would be used to pay for:
  --adoptive parents to serve as co-leaders in pre-service training;
  --food for parents attending training sessions;
  --child care for adoptive parents attending training sessions;
  --inviting furnishings and decorations for the rooms where adoptive 
        parent training is held;
  --additional supplies for adoptive home recruitment including a video 
        recorder and cameras, printing of brochures, displays for 
        literature and banners for use at recruitment events and an 
        equipped mobile van which can be taken to a wide range of 
        community events to promote becoming foster and adoptive 
        parents;
  --the preparation of Life Books for all adoptive children;
  --transportation funds for visitation between prospective adoptive 
        families and children when interstate adoptions are planned;
  --expenses associated with participation in adoption exchanges.
    Estimated Cost.--$700,000 ($350,000 per year).

          MANAGEMENT AND OVERSIGHT OF ADOPTION INCENTIVE PLAN
    Overall management of the Adoption Incentive Plan would rest with 
the Deputy Mayor for Children's Services. Day to day coordination and 
implementation of the adoption incentive initiatives will be assigned 
to the Child and Family Services Administration which is the agency 
District law for the work associated with providing permanent homes for 
children who are in the custody of the District of Columbia because of 
parental abuse or neglect. Several of the initiatives would involve one 
or more contracts with private organizations to carry out the work. 
CFSA would be accountable to the Deputy Mayor for Children and Families 
for reporting, evaluation and fiscal accountability on each initiative.
    General oversight of the Adoptive Incentive Plan would also be 
provided by a standing subcommittee of the Mayor's Advisory Committee 
on Permanent Homes for Children. Regular reports would be made to the 
Committee on progress in meeting measurable objectives.
    In addition, the plan includes a provision for a small amount of 
funds ($200,000) to be set-aside for an external evaluation of the 
effectiveness of the proposed adoption incentive initiatives. A 
contract would be let with an independent external evaluator to design 
and conduct necessary data collection and evaluative studies under the 
direction of the Mayor's Committee and/or the Deputy Mayor for 
Children's Services.
  Beginning in fiscal year 2002, the Mayor must prepare and submit a 
budget that identifies the amount of the savings of debt service 
arising from the repayment of indebtedness to the District of Columbia 
in connection with the sale of the District's rights in and to the 
Settlement Agreement to the District of Columbia Tobacco Settlement 
Financing Corporation.
    The requirement for a competitive bid for the selection of the 
Corporation's underwriter and bond counsel will have a positive fiscal 
impact as it will require that the Corporation's underwriter and bond 
counsel are chosen on the basis of lowest evaluated price.

           TITLE XXXVIII.--ADOPTION VOUCHER PROGRAM AND FUND

SEC. 3801. SHORT TITLE.

  This title may be cited as the ``Adoption Voucher Fund Act of 2000''.

SEC. 3802. LEGISLATIVE FINDINGS.

  (a) The long term needs of District of Columbia children who are in 
foster care am not being served. Although the Adoption and Safe 
Families Amendment Act of 2000 shortens the time in which children may 
remain in foster care, many of these children require additional 
assistance in order to be adopted.
  (b) The financial costs associated with maintaining the 3,000 foster 
children are high. In addition to the monthly payments to foster 
parents, the Child and Family Services Agency must supervise and staff 
each case, the Superior Court of the District of Columbia must pay 
attorneys and judges to review each case, and the Office of Corporation 
Counsel must staff and review each case.
  (c) Even more critical are the tragic human costs associated with 
allowing children to languish in foster care. The most recent study on 
the fate of foster children who ``age out'' of the child welfare system 
without finding a permanent home found that 12 to 18 months after they 
left foster care, just half were employed, one-third were receiving 
public assistance, one-fifth of the girls had given birth, and more 
than one-quarter of the boys had been incarcerated.
  (d) Many of the children in foster care have foster parents desirous 
of adopting them but are unable to do so because of the costs 
associated with adoption.
  (e) Providing these foster parents with a one-time financial 
assistance package in the form of vouchers would facilitate adoptions. 
Financial assistance would consist of vouchers to cover the costs of 
the necessary homestudies, compilation of information on the foster 
children's backgrounds and special needs, and attorneys' fees.
  (f) The Congress has appropriated, in the District of Columbia 
Appropriations Act, 2000 a $5 million payment, to remain available 
until September 30, 2001, to the District of Columbia to create 
incentives to promote the adoption of children in the District's foster 
care system.

SEC. 3803. DEFINITIONS.

  For the purpose of this title, the term:
          (1) ``Attorneys' fees'' means the legal costs and expenses 
        which are directly related to the adoption of a foster child or 
        foster children.
          (2) ``Foster care'' means 24 hour substitute care for 
        children placed away from their parents or guardians for whom 
        the Child and Family Services Agency has placement care and 
        responsibility.
          (3) ``Foster child'' and ``foster children'' mean a child, or 
        children, who comes under the jurisdiction of the Superior 
        Court of the District of Columbia pursuant to section 2320 of 
        Title 16 of the District of Columbia Code or whose parents' 
        rights have been relinquished pursuant to section 6 of An Act 
        to regulate the placing of children in family homes, and other 
        purposes.
          (4) ``Foster parent'' means an individual with whom a foster 
        child is legally placed,
          (5) ``Homestudy'' means the ``investigation, report and 
        recommendation'' required by section 307 of Title 16 of the 
        District of Columbia Code.
          (6) ``Related sibling group'' means a group of siblings with 
        at least one parent in common, residing together in the home of 
        a foster parent.

SEC. 3804. ESTABLISHMENT OF THE ADOPTION INCENTIVE PROGRAM; PURPOSE.

  There is established the Adoption Incentive Program (``Program''). 
The purpose of the Program is to provide foster parents with access to 
a one-time financial assistance package to assist them with the 
expenses associated with attorneys' fees and the homestudy relating to 
the adoption of a foster child, subject to the availability of funds in 
the Adoption Voucher Fund.

SEC. 3805. ESTABLISHMENT OF THE ADOPTION VOUCHER FUND.

  (a) There is established the Adoption Voucher Fund (``Fund''). The 
Fund shall be comprised of $2 million of the $5 million appropriated in 
the District of Columbia Appropriations Act, 2000, approved November 
29, 1999 (Public Law No. 106-113; 113 Stat. 1501), and additional funds 
in their entirety which Congress may appropriate from time to time for 
the purpose of providing incentives for foster parents to adopt 
District children.
  (b) Monies in the Fund shall be used only for the payment of 
homestudies and attorneys' fees, as well as any administrative costs 
directly associated with the implementation of this title. The Fund 
shall be the sole source of payments under the Program.

SEC. 3806. BENEFITS.

  (a) A foster parent may receive the following:
          (1) A voucher for the payment of $1,500 for a homestudy for 
        each foster child or related sibling group; and
          (2) A voucher for the payment of $5,000 for attorneys' fees 
        for each foster child or related sibling group; provided that, 
        the voucher may only be applied to attorney's fees charged at 
        an hourly rate of not more than $125 per hour and related 
        expenses billed at actual cost.
  (b) Nothing in this act shall be construed to create an entitlement 
to financial assistance for the adoption of a foster child, or foster 
children, if no funds remain available in the Adoption Voucher Fund.
  (c) Vouchers issued pursuant to this section shall be in addition to, 
and may not limit the amount of money available to a foster parent 
under section 3 of An act to provide for the care of dependent children 
in the District of Columbia and to create a board of childrens' 
guardians.

SEC. 3807, ADMINISTRATION OF THE ADOPTION INCENTIVE PROGRAM AND THE 
                    ADOPTION VOUCHER FUND.

  (a) The Child and Family Services Agency (``CFSA'') shall administer 
the Program and the Fund. CFSA shall:
          (1) Within 180 days of the effective date of this legislation 
        identify children whose permanency plans are adoption, for as 
        long as funds are available from the Fund;
          (2) Obtain a document signed by the foster parents stating 
        their intent to adopt within 180 days of identifying the 
        children pursuant to paragraph (1) of this subsection; and
          (3) Upon obtaining the signed document required by paragraph 
        (2) of this subsection, immediately provide a voucher for 
        attorneys' fees and a voucher for the homestudy to the foster 
        parent.
  (b) Vouchers issued pursuant to this section shall contain a 
statement describing the benefits to the adopting foster parents under 
the program, as well as the terms and conditions for the use of the 
vouchers.
  (c) Adopting foster parents shall present the vouchers to their 
attorney and licensed agency hired to perform the homestudy.
  (d) An attorney hired by a foster parent shall submit a voucher for 
attorneys' fees with his or her first bill to CFSA, which shall set up 
an account with a $5,000 balance. Thereafter, the attorney shall submit 
his or her bills quarterly to CFSA. CFSA shall pay the attorney within 
30 days with funds from the account.
  (e) The licensed agency hired to perform the homestudy shall submit 
its bill and the voucher for the homestudy to CFSA after the homestudy 
is complete for payment within 30 days.

SEC. 3808. FISCAL IMPACT STATEMENT.

  The Adoption Voucher Fund, which is subject to the availability of 
appropriations, shall be comprised of $2 million of the $5 million 
appropriated in the District of Columbia Appropriations Act for Fiscal 
Year 2000 as a Federal payment available until September 30, 2001, for 
incentives to promote the adoption of children in the District's foster 
care system in accordance with legislation enacted by the Council. The 
remaining $3 million will fund the proposed Mayor's Advisory Committee 
on Permanent Homes for Children for use of the Federal Adoption 
Incentives Funds. Furthermore, the proposed Budget Request Act for 
Fiscal Year 2001 contains a request for $5,000,000 for the same purpose 
to be available until September 20, 2002.

           Timelines for Adoption Incentive Plan Expenditures

  initiative # 1: creation of a flexible fund to support adoption of 
     sibling groups and other hard to place children ($1.5 million)
By August 15, 2000
    Identify private non-profit organization to operate flexible fund.
    Develop guidelines for eligible individuals.
    Develop parameters for allowable expenditures from fund.
    Develop protocols for accessing individual payments for families 
from flexible fund.
By September 1, 2000
    Grant $1.5 million to designated organization administering 
flexible fund for expenditure between September 1, 2000 and September 
30, 2001.
    initiative # 2: establishment of a scholarship fund to support 
      transition to independence for adopted teens ($1.6 million)
By September 15, 2000
    Identify organization to administer scholarship fund.
    Grant $1.6 million to organization administering scholarship fund 
to be placed in interest bearing account and subsequently allocated to 
interest bearing individual scholarship accounts for identified 
children.
    Establish eligibility guidelines for receipt of scholarship.
By September 30, 2000
    Establish interest-bearing account for scholarship funds.
    Announce and publicize scholarship fund availability for all 
prospective adoptive parents and parents in process and filing for 
adoption as of January 1, 2000.
By October 1, 2000
    Begin establishing individual scholarship accounts for identified 
children.
   initiative # 3: creation of an adoption resource center and post-
                adoption services capacity ($1 million)
    Adoption Support Center ($775,000)
By August 1, 2000
    Develop and issue RFP for District of Columbia Adoption Resource 
Center (2 year grant @ $375,00 for Year 1 and $400,000 for Year 2 = 
$775,000) with proposals due by September 1, 2000.
Between September 1, 2000 and September 20, 2000
    Review proposals and select contractor for Post Adoption Resource 
Center.
By September 30, 2000
    Sign contract with provider for one year with renewable second 
year. All funds to be contracted by September 30, 2001.
    Post-Adoption Services ($225,000)
By August 1, 2000
    CFSA to develop specific budget plan for use of $225,000 to enhance 
Post-Adoption Services.
By October 1, 2000
    Allocate additional funds to CFSA budget for use in accordance with 
plan developed by CFSA and approved by the Deputy Mayor for Children, 
Youth and Families.
initiative # 4: enhancement of adoptive home recruitment and support of 
                foster and adoptive families ($900,000)
By August 1, 2000
    CFSA to develop specific budget plan for use of $750,000 in 
additional funds to enhance neighborhood based adoptive home 
recruitment and support. Funds could be used for additional staff for 
evening and weekend recruitment; contracted neighborhood based 
recruiters and trainers to implement Family to Family program; stipends 
for foster parents to serve as co-leaders in preservices training; 
child care for parents involved in training; additional supplies 
(brochures, videos, a mobile van, etc.). For recruitment and training; 
preparation of life books for all adoptive children; contracted home 
studies; transportation expenses for visitation between children and 
adoptive parents and expenses associated with participation in adoption 
exchanges.
By October 1, 2000
    Allocate additional funds to CFSA budget for use in accordance with 
plan developed by CFSA and approved by the Deputy Mayor for Children, 
Youth and Families.
By September 1, 2000
    Deputy Mayor for Children, Youth and Families to hire one staff 
person to provide full-time staff assistance to Mayor's Committee on 
Permanent Homes for Children and to coordinate and oversee all 
activities funded through the Adoption Incentive Plan ($150,000 
allocated for salary, benefits and administrative costs).

 IDEAS FOR EXPENDITURE OF ADDITIONAL $5 MILLION IN ADOPTION/PERMANENCY 
                            INCENTIVE FUNDS
    Initiative # 1.--Provide funds for planning, design and initial 
implementation of an innovative supported community providing permanent 
homes for children in large sibling groups who are separated from their 
families because of abuse and neglect. ($2 million)
    Building on the experiences of models of children's villages that 
have been established in other parts of the country, the District wants 
to invest in the development of a similar model for the District which 
would provide safe, loving and permanent homes for very large sibling 
groups who are currently in out of home care because of abuse and 
neglect and who have been unable to be reunited with their birth 
families. For many of these children in large sibling groups, the 
current system has been unsuccessful in permanently placing them with 
relatives or in adoptive homes that can accommodate all siblings 
together. Many of these children are isolated from their sibling with 
the younger children living in foster families and the older ones in 
group homes or other congregate care facilities.
    The concept is to seed the construction or renovation of single 
family homes in a designated safe community that can reunite these 
children with their siblings and place them in the permanent care of 
relatives (who would be willing and able to care for them if adequate 
housing and supports were available) or with trained two parent 
families who would commit to raising these sibling groups as part of a 
permanent family until they are grown and self-sufficient. Caregivers 
would be well trained and supported, both financially and with ongoing 
supervision and services. Funds available through this initiative would 
be matched with private Foundation and other District funds to 
establish a village of approximately 10 families living in a close-knit 
neighborhood of single family homes. Services and supports to the 
families and children would be provided within the context of the 
neighborhood and community in which the homes are located. Planning for 
this work would begin by October 1, 2000 with the expectation that the 
community could be operational by December 31, 2001.
    Initiative # 2.--Establishment of Scholarship Fund for post-high 
school education, vocational or life skills training for all children 
who will exit the foster care system with a goal of independent living. 
($1 million)
    Funds would be used to expand the scholarship program currently 
being developed as an incentive for all children being adopted through 
the foster care system to allow a similar scholarship for each child 
who leaves the foster care system at age 18 or 21 with a goal of 
independent living. The scholarship fund would be administered through 
a non-profit organization and would provide a grant of between $3,000-
$8,000 per year/per child for additional education or training in order 
to help them make a successful transition to adulthood as they leave 
the foster care system.
    Initiative # 3.--Improve the capacity of the legal system to move 
children toward permanency through Adoption ($1.5 million)
    Additional attorneys are urgently needed within the District's 
Office of Corporation Counsel to adequately implement the Federal 
Adoption and Safe Families Act and to assure that timely and effective 
legal action is taken to move children toward permanency through 
adoption and/or legal guardianship. These funds would enable the Office 
of Corporation Counsel to immediately hire ____ and ____ additional 
attorneys and ____ paralegals who would be devoted exclusively to the 
child abuse and neglect caseload.
    Initiative # 4.--Expand the capacity of the District's Safe Shores 
Children's Advocacy Center to end the fragmentation in the current 
response of the Metropolitan Police Department, the Child and Family 
Services Administration, the U.S. Attorney's Office and the Office of 
Corporation Counsel to children who have experienced child abuse and 
neglect. ($500,000)
    These funds would be used to leverage other federal and private 
contributions to support the development of an integrated response that 
would end the current bifurcation of abuse and neglect in the District 
of Columbia.

    Senator Kyl. I appreciate that. I think that that is an 
area where a performance-based audit should be possible. And 
because everyone is committed to the object or to the goal, I 
think it would be very useful for us to track that and to see 
how well we have done as a result of the application of these 
funds, because it could call for greater support in the future 
if, in fact, the efforts work.

                               DEBT ISSUE

    And finally, Ms. Cropp, I think along with everyone else, I 
have continued to watch the debt issue that the Chairman has 
already talked to you about.

                              D.C. GENERAL

    D.C. General is, of course, the District's sole general 
hospital and is run by the D.C. Health and Hospital Public 
Benefit Corporation. GAO is, as you know, investigating whether 
the District violated Federal law by making a $2.2-million-a-
month loan to PBC.

                              LOANS TO PBC

    My information is that PBC has not returned any of the 
$65.7 million in District cash that it borrowed in two and a 
half years. Can you tell us what the District is doing to get 
repayment on those loans made to the PBC?
    Ms. Cropp. No, I cannot at this time, but I can submit that 
information for the record. I am not certain. No, I cannot at 
this time.

                      CONSULT FOR OVERSIGHT OF PBC

    Senator Kyl. I noted that this spring the District 
recommended using $60,000 of reserve funds to hire an 
independent consultant to assist the Council in its oversight 
of PBC regarding the provision of medical services to uninsured 
District residents. Do you know anything about that 
recommendation?
    Ms. Cropp. I do. Actually, there is a collaborative that is 
being formed with signatories being the Chair of the Council, 
the Mayor, the Chair of the Financial Authority and the Chair 
of the PBC board. It is an outgrowth of the Health Commission 
that the Mayor and the Council had formed to look at healthcare 
issues in the District of Columbia.

                        FINANCIAL STATUS OF PBC

    One of the things that came out of it was that we were very 
unclear as to the financial status of the PBC. We had great 
concern about the numbers that were there.
    Rather than rely totally on the figures that came out of 
the PBC, we wanted to get an independent view of the financial 
structure, the clinical structure and other areas of concern 
from the Public Benefit Corporation.
    We were going to get an outside group to look at it, 
Cambio. They have done Georgetown Hospital. They also did 
Greater Southeast Hospital.
    Senator Kyl. If I could just interrupt. I mean, you do not 
need the $60,000 consultant to know that you are not getting 
money repaid.
    Ms. Cropp. Part of the problem was that we could not get 
figures that we could embrace totally. And we needed to have an 
outside review to get the information.
    Senator Kyl. You know how much you are owed, though. I 
mean, you understand how much money you are owed----
    Ms. Cropp. Yes.
    Senator Kyl [continuing]. How much you loaned. What is it 
that----
    Ms. Cropp. But we still do not know all of the figures--we 
still do not know everything that is within the hospital. We do 
not know what all of the revenue is that comes into the 
hospital. We are not certain of what----
    Senator Kyl. So if I could just interrupt again, is the 
purpose for this, then, to better understand how you can 
recover the money?
    Ms. Cropp. How to recover the money, and also how to make 
sure that the hospital is functioning appropriately, 
financially and also clinically.
    We want to go beyond just that financial aspect. We want to 
make sure that the hospital is--perhaps there are some things 
that the hospital is doing that they may not have to do in the 
future.
    For example, the hospital does do about 75 percent of the 
trauma in the City. The rest of the hospitals cannot absorb 
that. But perhaps in the area of pediatrics, perhaps other 
hospitals can absorb that, and we can look at restructuring 
some of the things that the hospital does currently.
    So we want to take a broad picture of the healthcare 
delivery that the hospital is providing and take into 
consideration its financial status, its clinical structure and 
other areas to make sure that it is really functioning 
appropriately.
    Senator Kyl. I think that is a very important thing to do 
and would hope that you could share those results with the 
Committee.
    Okay. Thank you, Madam Chairman.
    Senator Hutchison. Thank you. Do you need a little more 
time, before----
    Senator Kyl. Thank you, but no.
    Senator Hutchison. Thank you, Senator Kyl.
    I will call on my ranking member, Senator Durbin.
    Senator Durbin. Thank you very much, Senator Hutchison. I 
apologize for being late. We had a meeting in my office about 
the restoration of some air service to a city in Illinois, and 
you can understand why I felt I had to be there for that.
    But I wanted to be here, especially today to first thank 
the panel which is assembled, Dr. Rivlin, whom I worked with 
years ago when I was a member of the House Budget Committee; 
and Ms. Cropp--though we do not know one another personally I 
find you on cable TV every night when I get back home so I know 
that you are actively involved in the government of the 
District of Columbia--and especially to Mayor Williams, whom I 
have known since he first went to work for the Department of 
Agriculture.
    And I was acquainted with your professional background and 
have been extremely impressed by your leadership in the 
District of Columbia. You have restored hope and faith on 
Capitol Hill among many of us that our Capitol City, our 
Nation's Capitol can be a source of great pride for many years 
to come. And I salute you for that. It is a very daunting 
challenge. And I think you have risen to it. And I want to 
continue to help you to do just that.
    I note here and my staff has told me that your overall 
budget is in the range of $5.3 billion, but the Federal 
contribution is in the range of some $400 million, if I am not 
mistaken, roughly, the direct part, which gives us at least 
some perspective in terms of the tail on the dog that is the 
subject of this hearing.
    My personal philosophy has been that you are a government 
entitled to rule your jurisdiction, because you were elected to 
that post. I believe in that democratic process.
    I have resisted efforts throughout my Congressional career 
when would-be mayors on Capitol Hill wanted to second-guess the 
leadership of the District of Columbia.
    And many times, I thought that that leadership was just 
dead wrong. I still felt they were entitled to make their 
mistakes. That is what democracy is all about. And I continue 
to feel that way.

                                TAX CUT

    I think that we can be helpful and should be helpful to the 
District of Columbia because of its importance to all of us who 
call it a second home, and to the nation.
    Having said that, when I step back and take a look at the 
District of Columbia, there is one thing that continues to 
trouble me and I am afraid is getting worse, and that is the 
situation where your proposed D.C. tax cut is growing in size.
    Am I correct in the information that I have that the D.C. 
tax cut this year will amount to some $125 million?
    Mayor Williams. That is roughly correct, Senator.
    Senator Durbin. So if I understand that, it basically means 
that about 30 percent of all the money that we are talking 
about appropriating to you is going to be given away to the 
residents of the District of Columbia in a tax cut?
    Mayor Williams. I am not sure of the exact percentage, but 
I think the consensus of leadership is that we need a balance 
between program investment, investment in human services 
capital, and some investment in tax reform and parity, that all 
of them have to come, you know, in combination, that there is a 
level and, with respect to our local home rule, we battled it 
out and, we came to the agreement we came to. It may be a pig, 
but it is our pig.
    Senator Durbin. It is your decision to make.
    Mayor Williams. Right.
    Senator Durbin. And you have, with your City Council, have 
made that decision.
    I will tell you that it is difficult for me to sit here and 
to look at these numbers that are going to grow to over $200 
million in the next couple of years and realize that half the 
money we are sending to the District of Columbia you will turn 
around and give away to the residents.
    Now, that might be a great idea--in fact, it is a great 
political idea for those who are in public office.
    But those of us who have observed the District of Columbia 
find it difficult to understand how the City Council can ignore 
the shortcomings in your educational system, the shortcomings 
when it comes to public safety, the shortcomings when it comes 
to public health, and decide that, instead, this money is not 
necessary. It is to be given away to residents.
    I will tell you the people I have spoken to who live in the 
District of Columbia, who would much rather have safer streets 
and better schools and clean up of a lot of the areas that are 
blighted in this District than to receive $50 or $100 in a tax 
cut.
    It is a wonderful political exercise with some who believe 
that that is the key, is to keep giving money back to the 
people.

                       MEETING BASIC OBLIGATIONS

    But if the District is not meeting its most basic 
obligations in terms of protecting the people of the District 
and providing a good education for their kids, I think it is 
indefensible.
    And as that number grows, as your tax cut grows, I think 
your call on the Federal Government for more and more money 
becomes less convincing. You obviously do not need it. If you 
can give it away, you do not need it.
    And this year, 30 percent of what you are asking for in 
direct payments from the Federal Government you clearly do not 
need, because you are going to turn around and give it back in 
terms of tax cuts.
    I asked in the course of last year's appropriation bill for 
a report card from the District to see how you are doing. We 
had the Casey Foundation evaluation about kids in the District. 
And I really believe that you, Mayor, are on the right track.
    I see what you are doing in terms of setting performance 
goals and having people stand up and say, ``I am going to try 
to put so many more people in drug rehab. We are going to try 
to do so much in health clinics.'' All of these things make a 
lot of sense to me.
    And I would like to have, if you can, your analysis of the 
progress you are making and the obstacles you are running into 
in providing those basic services to address the needs of 
children in the District of Columbia.
    Mayor Williams. Well, thank you, Senator. But I think any 
person would say that they might like to try to bring our city 
to, you know, what is--I will put it this way, for our city to 
realize its full promise and potential and to successfully work 
its way through this recovery, to me it really is a balance 
between bringing our government to its right size, investing in 
our equipment, our plan, and our people. And in sharing that, 
we have got a robust, prosperous economy.
    Certainly, there are always questions of balance and there 
are questions of degree, but I think that there is a role in 
there. And I think that American citizens have an interest in 
seeing that the businesses and the taxpayers in the City are on 
some kind of parity with taxpayers everywhere else because we 
are our Nation's Capital, and right now we are really at, for a 
lot of different reasons, historically and otherwise, somewhat 
of a disadvantage.
    And so anything we can do to right that balance, I think, 
is going in the right track. Again, we may have our differences 
in degree or magnitude.
    Speaking of children, our emphasis on children flows from 
our neighborhood summary, where I say this over and over again 
and people groan, but we had 3,000 people at the convention 
center. These were all regular citizens. They were not bused 
in. They were not my political cronies. They were just regular 
folks.

                        STRATEGIC PLAN FOR CITY

    We had folks from every quadrant of the City, every ward of 
the City, old folks, young folks, black folks, white folks; 
everybody was there. And these folks sat there. They spent over 
7 hours of their time on a Saturday in developing a vision, 
strategic plan for the City.
    Their top two priorities--because we used a lot of 
electronic gadgetry, their top two priorities were restore, 
refurbish our neighborhoods, support our children and families. 
Those were the top two goals.
    So a lot of this budget flow and emphasis on children flows 
out of that. And I give you two areas where we want to really 
put a special emphasis on children.
    Number one is I am going to be calling together a group of 
citizens and work with the Council and the Authority and ask 
the group of citizens--a small number so it is manageable, work 
with a consultant, work with staff, work with our inspector 
general, and go into our delivery system, if you want to call 
it that to be kind, for our children, and tell me what we are 
doing wrong, where we need to improve, where we need to fix 
things, where we need to refurbish, blow up, rehabilitate the 
process, because right now in many, many ways, particularly as 
it relates not just to youth services in general but to 
juvenile justice, we are not doing the job.
    Senator Durbin. May I ask a specific question?
    Mayor Williams. Yes.
    Senator Durbin. Last year I compared the District of 
Columbia to states in terms of performance for children, and 
some said, ``That is not fair. Compare the District of Columbia 
to cities, not to States, because of the unique governance 
here.''

                   DISTRICT COMPARED TO OTHER CITIES

    And so, we took a look at that particular issue, the top 50 
cities in the United States, and compared the District of 
Columbia's statistics when it comes to children and poverty. 
And, Mayor, when it comes down to the health, in particular 
health services for children and for pregnant women, the 
District of Columbia ranked dead last again.
    In a city where the City Council has decided, ``There is 
too much money; we are going to give it back,'' you have a 
situation where the District of Columbia ranks 50th out of 50 
cities on the percent of total births to mothers receiving late 
or no prenatal care.
    And you and I both know that is a recipe for disaster. 
Mothers without prenatal care are kids who are going to give 
birth to children with a world of problems, expensive problems, 
for a lifetime. This is in a city that has decided ``We are 
going to give away a tax cut, 30 percent of the money we get 
from the federal government,'' and you rank dead last in the 50 
cities.
    Would this be a radical idea? Could you go to the D.C. City 
Council and perhaps bring that to their attention, and maybe 
suggest to them that a few more prenatal clinics and a few less 
dollars being given away in tax cuts might be in the best 
interest of residents who come 3,000 strong and tell you that 
strong families is one of the top two priorities in their mind?
    Ms. Cropp. Senator, I would like to also have an 
opportunity to make some comments.
    Senator Durbin. Sure, of course.
    Ms. Cropp. Let me beg to differ somewhat with your 
suggestion that the dollars that the Federal Government is 
giving to the District of Columbia that the City is using to 
deal with the tax cut.
    We are using local revenue, not Federal dollars, first of 
all. Although the Federal dollars are a part of the 
revitalization plan that came about because of the change in 
the Federal payment that would go to the District of Columbia.
    The Council--and I would like to share with you our 
legislative agenda, and perhaps also there is a need for us to 
get together and talk a little off line about some of the 
things that the Council has done.
    We have worked extremely hard to provide better health 
care, and expanded to look at approaches where we could improve 
education----
    Senator Durbin. May I ask you a question?
    Ms. Cropp [continuing]. For our citizens in the District of 
Columbia.

                                 BIRTHS

    Senator Durbin. Do you disagree with the conclusions that 
the District of Columbia is in the worst shape of the top 50 
cities in America when it comes to births to mothers without 
prenatal care, ranks 49th out of 50 in low-birth weight babies, 
ranks 49th out of 50 in percent of pre-term babies? Do you say 
this is a crisis?
    Ms. Cropp. I may not be able to argue with that, but there 
are other things that we have to do. We have to look at the 
whole picture. And part of looking at the whole picture is 
looking at approaches and ways to help our economy and revenue 
to grow in the future, because the Federal Government is not 
going to continue to give us dollars.

                                TAX RATE

    We are going to have to figure out other approaches. Let me 
just share this one statistic with you, for example. The 
District's lowest tax rate of 6 percent for our lowest income 
people, those individuals who make $0 to $10,000, is higher 
than the wealthiest people pay in the State of Virginia, right 
next door. The people who make under $10,000 pay more taxes 
than the wealthiest of people pay in Virginia.
    We, in the District, because of where we are and how we are 
surrounded by much wealthier States who do not have the 
problems of an urban city--when you were saying earlier about 
not comparing the District to States, why? Because like any 
other urban city in this country, we have a population that is 
older, that is sicker, and that is poorer.
    In addition to that, we are further penalized by the fact 
that we do not have the wealthier suburban areas to help offset 
the costs of the District.
    Senator Durbin. Let me----
    Ms. Cropp. Sixty-two percent of the people who work for the 
District of Columbia government--62 percent who work for the 
government, live outside of the District of Columbia.
    So we have to come up with better approaches and different 
ways to help our economy grow. Tax parity is one when our 
surrounding jurisdictions are bringing in--when their taxes are 
so much lower. At the same time, we are challenged, and I think 
we are meeting that challenge, to meet the needs of our people 
who need more.
    Senator Durbin. We disagree, and we are bound to disagree 
because I have made my point on this last year. And I did not 
realize the Chairman had not asked questions. And I want to 
just wrap this up.

                             PRENATAL CARE

    But let me give you this analogy: If you know that the 
failure of the District of Columbia to have appropriate 
prenatal care for mothers results in the birth of low-birth 
weight children who are bound to have additional medical 
expenses and problems for a lifetime--and we can certainly 
document everything I have just said to be true in the District 
of Columbia--and you insist, instead, on focusing on giving tax 
cuts with money instead of building prenatal centers for these 
mothers for their health care, the only analogy I can think of 
is someone who has just bought new draperies for their home, 
and enjoys it very much, did not have enough money to fix the 
roof, and the water is coming in.
    Those children will cost you, the District, the taxpayers, 
and America, a fortune because we did not make the investment 
in their lives early enough.
    And the District of Columbia, for all the progress it has 
made, still has in many areas, deficiencies which require some 
enlightened thinking.
    And I think the City Council is just off base when it takes 
30 percent of the Federal funds and gives it away, saying, ``We 
cannot think of a thing we can do in the District of Columbia 
with $125 million except to give it back.''
    Well, anybody who is a family of a victim of a drive-by 
shooting can think of something that could have been done in 
terms of police protection.
    People who are worried about the test scores of kids coming 
out of D.C. schools can think of something.
    And the mothers of these children who are holding these 
babies who have a lifetime of problems ahead of them, can think 
of something.
    Ms. Cropp. And the Council has, and I think our budget 
reflects that we have.
    Senator Durbin. Well, unfortunately, the progress is too 
slow as far as I am concerned.
    Ms. Cropp. Well, I will agree with that. We have found a 
point of agreement. It is much slower than what I think it 
ought to be.
    Senator Durbin. I would ask the Chairman, Senator 
Hutchison, for unanimous consent that the remaining questions I 
have be submitted for the record.
    Senator Hutchison. Without objection.
    Senator Durbin. Thank you very much. Thank you.
    Senator Hutchison. I have several questions, but I just 
want to make one other point. I think Chairman Cropp was very 
good in representing the Council views and looking at the place 
where you sit, and the competition around the District of 
Columbia for residence.

                         TAX REVENUES GOING UP

    I have looked at the projections with the tax cuts that 
were put in place last year. The projections are that the 
revenue will go up because you are encouraging people to stay 
in the District and move back into the District. And so, in 
fact, the tax revenues are going up, not down.
    I think they have responded quite correctly to looking at 
where they sit and doing the best that they can to make this 
city a place that people want to live.
    I do not disagree with your points on the things that have 
not been done. I think we should all work for improving 
prenatal health care, but I do not think it is the tax cut that 
is keeping us from doing that.
    I think you are bringing people in. So we have, you know, 
two ways of looking at this. But in that instance, I think they 
are on the right track, and let us just work together to try to 
improve the situation that you mentioned.

                        MARIJUANA POSSESSION LAW

    Let me ask you a couple of questions. Earlier in the year, 
the Council considered strengthening the City's marijuana 
possession laws. The U.S. Attorney has expressed concern that 
the District's lax laws on the point are fostering new criminal 
gangs in the District that have been selling this drug.
    I want to ask you if the City is still considering 
strengthening its marijuana possession laws, or how are you 
addressing the issue that has been addressed by the U.S. 
Attorney?
    Ms. Cropp. If I may get that information back to you, 
Senator--we are looking at all of our laws and trying to 
strengthen them. I do not want to put something on the record 
that is not totally accurate. If I can get that information as 
to what we are doing specifically with the marijuana laws, I 
would get it back to you.
    Senator Hutchison. Okay. Is it something that is being 
considered by the Council ongoing, the strengthening of those 
laws?
    Ms. Cropp. Yes, it is, and the Council will--I have just 
been informed that we will take action on it before recess. So, 
before July, you will get information on that.
    [The information follows:]

             REPORT ON DISTRICT'S MARIJUANA POSSESSION LAWS

Purpose of the Bill
    The purpose of Bill 13-240 is to deter marijuana trafficking and 
the violence surrounding marijuana trafficking by amending the District 
of Columbia Uniform Controlled Substances Act of 1981 to include 
marijuana as a Schedule III controlled substance. This bill will make 
the manufacture, distribution and possession with intent to distribute 
marijuana a five-year felony, except that the first conviction for the 
manufacture, distribution or possession with intent to distribute \1/2\ 
pound or less of marijuana will remain a misdemeanor if the person has 
not previously been convicted of manufacturing, distributing or 
possession with intent to distribute a controlled substance or an 
attempt to do so.
    In addition, this change will permit pretrial detention under D.C. 
Code Sec. 23-1322 of persons charged with the manufacture, distribution 
or possession with intent to distribute marijuana because these 
offenses will fall within the definition of ``dangerous crime'' under 
D.C. Code Sec. 23-1331; the bill will subject persons convicted of the 
manufacture, distribution and possession with intent to distribute 
marijuana while armed to increased penalties under D.C. Code Sec. 22-
3202 because these offenses will fall within the definition of 
``dangerous crime'' under D.C. Code Sec. 22-3201; and it will subject 
persons to enhanced penalties upon conviction of such offenses as 
distribution of marijuana to a minor under D.C. Code Sec. 33-546 and 
distribution or possession with intent to distribute marijuana within a 
drug free zone, that is, within 1,000 feet of educational institutions, 
day care centers, recreational facilities and libraries under D.C. Code 
Sec. 33-547.1.
    It also brings the District of Columbia into conformity with laws 
in all fifty states which make distribution of at least some, if not 
all, quantities of marijuana a felony. As a result, the bill will 
reduce the probability that people from other jurisdictions will enter 
the District of Columbia to sell marijuana.
Chronology of actions taken by the Council of the District of Columbia
    May 4, 1999--Bill 13-240, the ``Distribution of Marijuana Amendment 
Act of 1999,'' was introduced by Councilmembers Brazil and Jarvis and 
was referred to the Committee on the Judiciary.
    January 13, 2000--The Judiciary Committee held a roundtable on Bill 
13-240. (Testimonies from public witnesses available on request).
    May 10, 2000--The Judiciary Committee held a public hearing on Bill 
13-240. (Testimonies from public witnesses available on request).
    May 25, 2000--The Judiciary Committee held a mark-up and discussion 
of Bill 13-240. Committee print of Bill 13-240 attached.

                             A BILL 13-240

               IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
  To amend the District of Columbia Uniform Controlled Substances Act 
of 1981 to include marijuana as a Schedule III controlled substance in 
order to make the manufacture, distribution and possession with intent 
to distribute marijuana a five-year felony, except for the first 
conviction for the manufacture, distribution or possession with intent 
to distribute \1/2\ pound or less of marijuana which will remain a 
misdemeanor if the person has not previously been convicted of the 
manufacture, distribution or possession with intent to distribute a 
controlled substance or an attempt to do so; and to amend section 1(g) 
of An Act To control the possession, sale, transfer, and use of pistols 
and other dangerous weapons in the District of Columbia by amending the 
definition of dangerous crime to include offenses punishable by 
imprisonment for less than one year.
  BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 
act may be cited as the ``Distribution of Marijuana Amendment Act of 
2000''.
  Sec. 2. The District of Columbia Uniform Controlled Substances Act of 
1981, effective August 5, 1981, (D.C. Law 4-29; D.C. Code Sec. 33-501 
et seq.), is amended as follows:
          (a) Section 208(a) (D.C. Code Sec. 33-518(a)) is amended as 
        follows:
                  (1) Paragraph (4)(H) is amended by striking the word 
                ``and'' at the end.
                  (2) Paragraph (5)(BB) is amended by striking the 
                period and inserting the phrase ``; and'' in its place.
                  (3) A new paragraph (6) is added to read as follows:
                          ``(6) Cannabis.''.
          (b) Section 212(2) (D.C. Code Sec. 33-522(2)) is repealed.
          (c) Section 231(a)(2)(B) (D.C. Code Sec. 33-541(a)(2)(B)) is 
        amended by striking the phrase ``both'', and inserting the 
        phrase ``both; except that upon conviction of manufacturing, 
        distributing or possessing with intent to distribute \1/2\ 
        pound or less of marijuana, a person who has not previously 
        been convicted of manufacturing, distributing or possessing 
        with intent to distribute a controlled substance or attempting 
        to manufacture, distribute, or possess with intent to 
        distribute a controlled substance may be imprisoned for not 
        more than 180 days or fined not more than $5,000 or both.'' in 
        its place.
  Sec. 3. Section 1(g) of An Act To control the possession, sale, 
transfer, and use of pistols and other dangerous weapons in the 
District of Columbia, to provide penalties, to prescribe rules of 
evidence, and for other purposes, approved July 8, 1932 (47 Stat. 650; 
D.C. Code Sec. 22-3201(g)), is amended by striking the phrase ``, if 
the offense is punishable by imprisonment for less than 1 year''.
  Sec. 4. Fiscal impact statement.
  The Council adopts the fiscal impact statement in the committee 
report as the final impact statement required by section 602(c)(3) of 
the District of Columbia Home Rule Act, approved December 24, 1973 (87 
Stat. 813; D.C. Code Sec. 1-233(c)(3)).
  Sec. 5. Effective date.
  This act shall take effect following approval by the Mayor (or in the 
event of veto by the Mayor, action by the Council of the District of 
Columbia to override the veto), approval by the Financial 
Responsibility and Management Assistance Authority as provided in 
Sec. 203(a) of the District of Columbia Financial Responsibility and 
Management Assistance Act of 1995, approved April 17, 1995 (109 Stat. 
116); D.C. Code Sec. 47.392.3(a)), a 60-day period of Congressional 
review as provided in section 602(c)(2) of the District of Columbia 
Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Code 
Sec. 1-233(c)(2)), and publication in the District of Columbia 
Register.

                   COMMERCIAL REVITALIZATION PROGRAM

    Senator Hutchison. Thank you. In the fiscal year 2000 
appropriations bill, we included $5 million for the Mayor, in 
consultation with the Council, to provide offsets against local 
taxes for commercial revitalization programs in enterprise 
zones and low and moderate income areas of the District.
    The purpose of this was to try to get property renovated, 
cleaned up, and perhaps bring new investment in that would 
create a safer environment. Could you give me a progress report 
on whether you have been able to use any of this incentive for 
the purpose that I have stated?
    Mayor Williams. I can get you in writing, Senator, the 
detailed follow up as I did--I know, based on our conversation 
we had earlier this year, as a matter of fact, when I visited 
the International Convention of Shopping Centers with a member 
of the Council. Now for the second year in a row, there is a 
growing and strong interest now in investing in our city.
    As I suggested to you earlier, we have talked to major 
retailers who we are actively negotiating with to come to our 
city, provide jobs for our residents, shopping opportunities 
for our citizens.
    And part of our incentive package is exactly this $5 
million. I can get you detailed information on that. So it is 
working, and it is part of our arsenal that we are using to 
negotiate with these investors. We hope to, as a matter of 
fact, have some major announcements--I would like them to be 
last week, but very soon.
    Senator Hutchison. Have you continued into the next budget 
year an added amount for this purpose, or have you continued to 
build on the $5 million?
    Mayor Williams. I know that we have continued a robust 
effort to include incentives for investments and incentives for 
employing our residents, you know, industrial revenue bond 
financing, the whole package, again, of tools in these 
enterprise zones that we want to use for investors because I 
think you were exactly right on the money. It is a real 
incentive we can offer.
    Senator Hutchison. I would like a report just to see that.
    [The information follows:]

        District of Columbia--Commercial Revitalization Program

                  OVERVIEW OF POLICY AND PROGRAM GOALS
    A primary goal of the Mayor's economic development strategy is to 
stimulate increased commerce, capital investment and employment growth 
within District of Columbia neighborhoods by reducing the total tax 
burden borne by our domestic enterprises. To help implement this 
policy, the Mayor established the DC Commercial Revitalization Program 
(CRP), which offers temporary tax relief to developers, manufacturers, 
building owners, tenants and other taxpayers (Taxpayers) that acquire, 
construct, rehabilitate, lease, and operate commercial facilities 
situated within designated areas of the District.
    Eligible Taxpayers may qualify for forgiveness of transfer taxes, 
the abatement of real property and sales tax liability, and the award 
of employment tax credits in connection with the development of retail 
facilities in priority development areas, including the DC Enterprise 
Zone and other designated low and moderate income neighborhoods 
characterized by a dearth of retail goods and services and related 
employment opportunities. Business Improvement Districts (BIDs), 
business guilds, alliances and other collaboratives that sponsor 
commercial development in under served communities by contributing 
supplemental tax payments or special assessments also may be eligible 
for CRP assistance.

                  PROGRAM AUTHORITY AND ADMINISTRATION
    Section 168(a) of the District of Columbia Appropriations Act of 
2000 authorizes the transfer from the District of Columbia Financial 
Responsibility and Management Assistance Authority (Authority) to the 
District of Columbia the sum of $5,000,000 to help neutralize the 
fiscal impact of tax concessions allocated to stimulate increased 
business activity in selected neighborhoods. CRP funds are derived from 
interest earnings on investments held by the Authority on behalf of the 
District government. CRP is administered by the Office of the Deputy 
Mayor for Planning and Economic Development (DMED). Program funds are 
used in conjunction with other economic development tools employed by 
DMED to leverage public and private dollars invested in priority 
development areas. Available District and federal resources include 
Community Development Block Grants, Economic Development Administration 
grants, Brownfields loans, grants and credits, enterprise zone tax 
incentives, private activity bonds and tax increment bonds. It is 
anticipated that CRP funds also will be used in conjunction with credit 
and financial support provided from funds held in the Revenue Bond 
Program Fee Account authorized under DC Code Section 47-340 et seq.

                               PRIORITIES
    Projects situated at or in close proximity to sites that will house 
the District's ``Government Centers'' offices receive priority 
consideration for CRP assistance. These planned Centers are located 
within the DC Enterprise Zone and other low and moderate income 
neighborhoods traditionally under served by commercial developers and 
retailers. By providing inducements for retail businesses to co-locate 
with these government service operations, the District intends to 
capitalize on the momentum already generated by recently completed 
Metro Rail Stations at these retail and transportation hubs. Priority 
retail services include, by way of illustration only:
  --Self-service retail establishments (independently owned or part of 
        a corporation that operates a chain of retail establishments 
        under the same trade name) that meet the requirements of the DC 
        Supermarket Tax Exemption Act of 2000;
  --Restaurants that provide on-site table service and eating 
        facilities; movie theaters and playhouses;
  --Manufacturing facilities; wholesale and discount clothing and dry 
        goods stores;
  --Boutiques, bookstores, coffee shops and other stores featuring 
        specialty items;
  --Communications software development facilities and other technology 
        research and development incubators, tourism and entertainment 
        facilities.

                     DEVELOPMENT AND FINANCING PLAN
    Each CRP Project plans shall include description of the Taxpayer(s) 
to whom the benefit is to be awarded; the nature and amount of 
assistance to be provided; and the public purpose benefits that will 
result from the project. The plan also shall describe zoning, 
environmental, historic preservation and site control issues, if any, 
proposed land uses, site development and construction plans, and 
project renderings (see Exhibit A).
    Each eligible project must meet three or more of the following 
public purpose objectives:
    1. Increase the availability of consumer goods, services or 
business activities that have not generally been available to residents 
within the proposed project area;
    2. Enhance the value and appearance of commercial facilities;
    3. Expand the District's real property or sales tax base;
    4. Increase the employment of residents within the project's 
service area; and
    5. Expand economic opportunities for District-certified businesses.
    For projects involving the acquisition of an existing facility, the 
Taxpayer must incur within a 24 month period substantial rehabilitation 
expenditures of not less than 15 percent of the dollar value of the CRP 
award.

                          PROJECT FEASIBILITY
    A prospective CRP-assisted project must meet reasonable standards 
of commercial viability as determined by the Office of the Deputy Mayor 
for Planning and Economic Development in consultation with the 
District's financial advisors. This determination generally will be 
based on the results of a 10 year pro forma income and expense schedule 
and feasibility study conducted by recognized experts which shall 
include a description of nature and terms of equity, loans, grants, 
contracts and federal credits to be committed to the project. With 
respect to proposed projects not eligible for tax relief under any 
existing District law, the Office of the Chief Financial Officer will 
conduct a fiscal impact analysis to determine the amount of tax relief 
(and available CRP funds), if any, that reasonably should be allocated 
to support the proposed project.
               pending commercial revitalization projects
                    (projected commitment dates \1\)
    Proposed sites and projects currently under review include:
---------------------------------------------------------------------------
    \1\ Commitment dates subject to completion of land assembly, 
negotiation of final business terms, and approval by the DC Financial 
Responsibility and Management Assistance Authority and Congress of 
``Supermarket Tax Exemption Act of 2000'' DC Act 13-365, which was 
adopted by the Council of the District of Columbia on June 12, 2000.
---------------------------------------------------------------------------
Columbia Heights Grocery and Retail Development (1st Quarter Fiscal 
        Year 2001)
    Forgiveness of transfer taxes and abatement of real property taxes 
in connection with acquiring, constructing, redeveloping and operating 
a full-service supermarket, abutting retail stores and entertainment 
facility.
    Waiver of real property tax liability in connection with 
supplemental taxes or special assessments incurred to support the 
reconstruction of building facades and the provision of supplemental 
municipal services within the project area.
Georgia Avenue Neighborhood Revitalization Strategy Area (3rd Quarter 
        Fiscal Year 2001)
    Forgiveness of transfer taxes and abatement of real property tax 
liability incurred in connection with the acquisition, construction, 
rehabilitation and redevelopment of 50,000 square foot or larger 
commercial facility owned and operated by national retailer within the 
designated Neighborhood Strategy Area.
    Waiver of real property tax liability in connection with 
supplemental taxes or special assessments incurred to support the 
reconstruction of building facades and the provision of supplemental 
municipal services within the project area.
Brentwood/Rhode Island Avenue Shopping Center (2nd Quarter Fiscal Year 
        2001)
    Real property tax abatement in connection with development of 
commercial parking facility to accommodate new shopping center.
    Waiver of real property tax liability in connection with 
supplemental taxes or special assessments incurred to support the 
reconstruction of building facades and the provision of supplemental 
municipal services within the project area.
Camp Sims Grocery and Retail Development (2nd Quarter Fiscal Year 2001)
    Forgiveness of transfer taxes and abatement of real property tax 
liability in connection with the acquisition, construction, 
redevelopment and operation of a full service supermarket, multi-screen 
movie theater, and retail stores.
    Waiver of real property tax liability in connection with 
supplemental taxes or special assessments incurred to support the 
reconstruction of building facades and the provision of supplemental 
municipal services within the project area.

                               Exhibit A

                   Commercial Revitalization Program

                project submission and review checklist
    Requests for CRP benefits shall not receive final approval unless 
the project meets all applicable regulatory requirements and the 
benefited taxpayers completes, executes and delivers to the District 
certain agreements and certificates regarding its planned contracting, 
employment and human rights practices. Taxpayers must contact the 
appropriate agency representatives. Documents that must be submitted as 
part of the assistance request are listed below.
  --List of Principals and Officers
  --Name, Address of Registered Agent
  --Most Recent Annual Report
  --3 Yrs Federal/State Tax Returns
  --Certificate of Good Standing
  --Description of Pending Litigation
  --Site Plans, Location Maps, Project Renderings
  --Feasibility-Fiscal Impact Study
  --Funding Sources and Uses
  --List of District-owned Properties
  --Tax Certification Affidavit
  --Non-Discrimination Certificate
  --Equal Employment Opportunity Policy Statement
  --Assurance of Equal Employment Opportunity Compliance
  --First Source Employment Agreement
  --MOU Certification Affidavit 







    Mayor Williams. Right.
    Senator Hutchison. That was seed money.
    Mayor Williams. Right.

                             Reserve funds

    Senator Hutchison. And if you are now taking it on to a new 
level, I think that is very good.
    Dr. Rivlin, in last year's appropriations bill, we had 
language governing the reserve fund and the conditions on the 
use of the reserve fund. It stated that the funds would only be 
spent according to criteria established by the chief financial 
officer and approved by the Mayor, the Council, and the Control 
Board. Have those financial criteria for spending from the 
reserve fund been established?
    Dr. Rivlin. Yes, they were established, and they were, in 
fact, stated I believe in last year's Budget Support Act. But I 
think in attempting to implement those criteria, we ran into 
the difference in conception that the District had of the uses 
of the reserve fund and that you had as a more restrictive 
definition, so that not all of the uses which fell within our 
set of criteria were--did you think were entirely appropriate. 
So if you remember, we went back and forth on that.
    Senator Hutchison. We did, and I think we came to the right 
conclusion, and I think we worked it out in the right way.

                      EXPENDITURES OF RESERVE FUND

    But my question was if there are a set of financial 
policies for the expenditures of the reserve fund that have 
been put forward by the chief financial officer and approved by 
the Mayor, the Council, and the Control Board, not the criteria 
that were in the law, but a set of procedures on financial 
policy.
    Dr. Rivlin. Well, we had a set of criteria which we agreed 
on, but we were operating, at that time, on a different 
conception of the reserve fund. We thought it had to be 
appropriated every year and, therefore, that we had to have a 
new $150 million every year.
    And, therefore, it seemed reasonable to us that over the 
year, as the year progressed, we had not had dire emergencies 
on which to spend this, that it could be spent for other useful 
purposes which did not obligate the District to continuing 
expenditures. That did seem appropriate, consistent with our 
reading of the law that the funds could not carry over but had 
to be reappropriated the next year.
    And as you know, we have had discussions this year with you 
about a different conception of the reserve fund, where the 
funds would carry over; and that changes the game essentially. 
It means that much stricter criteria are appropriate for a true 
rainy day fund that carries over from one year to the next.
    Senator Hutchison. Well, let me just say that I think we 
have gotten through this year by communicating and talking 
about what our views were. I would hope that we can work 
together on some language in this year's bill that would be 
more clear on the use of the emergency fund.

                         Interest bearing fund

    I do think it needs to be a real fund, interest bearing, 
set aside, and then provide more flexibility in a contingency 
fund because I think that was a point you made, Dr. Rivlin, 
that there are certain expenditures that come up, but there is 
no authorization for spending the money on the contingency that 
is necessary. So I want to provide clear parameters on the 
reserve fund, make it a real fund that everyone can see.

                        Contingency expenditures

    And then, more flexibility in the surplus area so that 
there can be contingency expenditures because I think it is 
important that you have flexibility because you do have 
unanticipated matters. I also think it is important that you 
have the ability to spend surplus first, contingency second, 
and reserve as a last resort.
    I think if we can work together to clarify these, I think 
it will give you the flexibility you need to respond to the 
things that arise that were not anticipated, and also give the 
comfort level that there is a good, solid emergency fund that 
is not touched except in a very extreme circumstance.
    And so I think we will be looking to work with you as we go 
down the road; and also, I think, have in place financial 
policies because as we look to the control board going out, I 
think it is important that we have financial policies that 
everyone agrees are the right ones as we make that transition, 
so that there is something we can look at and measure each year 
against. And that is the financial policies that would be put 
in place.
    I really have a goal for making the District one of the 
best-run cities in America. I think the rating can go up 
significantly, and I think we are on the right track to do 
that.

                             Control board

    I just want to make sure that we have policies in place as 
the control board goes out, that the Mayor, and the Council, 
with the advice of the control board and the chief financial 
officer, agree to; and that you agree that these are the right 
policies for the City. Then there will be a measurement so that 
you will know if you are getting off the mark. And there will 
be a way for you to, I think, go forward to your own management 
needs without the control board in place.

                     Additional committee questions

    So, we will be working on those things together, I hope, in 
the next few months. I appreciate where we are. I think if we 
are going to the goal line, we are on the 10-yard line right 
now. I just want to put it over and have everything in very 
solid shape as we look next year for two people sitting at this 
table instead of three.
    [The following questions were not asked at the hearing, but 
were submitted to the District for response subsequent to the 
hearing:]

     Questions Submitted to the Council of the District of Columbia

                 Question Submitted by Senator Jon Kyl

                           REPAYMENT ON LOANS
    Question. With respect to District of Columbia funds that have been 
advanced or ``loaned'' to the Health and Hospitals Public Benefit 
Corporation (PBC), what provisions have been made to recover these 
funds from the PBC.
    Answer. I must report that there is virtually no likelihood these 
funds will be recovered. Past practice was to advance the PBC cash 
against the anticipated receipt of accounts receivable for services 
rendered. However, these accounts receivable were never collected in 
the amounts necessary to cover cash amounts advanced by the District. 
For fiscal year 1998 and fiscal year 1999 a total of $41.3 million in 
cash advanced to PBC will be written off as uncollectable in the 
District's fiscal year 2000 Comprehensive Audited Financial Report 
(CAFR). We expect to write off approximately $67.3 million in fiscal 
year 2000 cash advances which will also be reported in the fiscal year 
2000 CAFR.
    I have ended the practice of making such cash advances and have 
notified the Mayor, the City Council and the PBC Board that all funds 
provided by the District to the PBC must come through the 
appropriations process. We are also taking other steps to improve the 
financial management of the PBC including the consolidation and 
management of all bank accounts.
                                 ______
                                 

             Questions Submitted to the Office of the Mayor

          Questions Submitted by Senator Kay Bailey Hutchison

    Question. What percentage of the District's Fiscal Year 2001 budget 
is devoted to new spending programs? Please provide the Subcommittee 
with a written analysis of these new programs and the corresponding 
costs.
    Answer. Approximately 6 percent of the fiscal year 2001 budget is 
devoted to spending programs.

        Appropriation title                                 New programs

Governmental Direction and Support......................     $28,496,866
Economic Development and Regulation.....................      25,146,178
Public Safety and Justice...............................      20,578,746
Public Education........................................     170,618,697
Human Support Services..................................      30,870,050
Public Works............................................      10,876,049
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................     286,586,586

    Question. Please provide the Subcommittee with a written analysis 
of these new programs and the corresponding costs.
    Answer. The information pertains to the operating budget and does 
not include new capital projects.

Advisory Neighborhood Commissions (DX0):
    Advisory Neighborhood Commission support............         $50,000
    Establishment of the Office of Advisory Neighborhood 
      Commissions.......................................          75,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................         125,000
                    ========================================================
                    ____________________________________________________
Office of the Mayor (AA0): The agency is targeted to 
    receive funds pending certification. The Chief 
    Financial Officer will make these funds available 
    upon certification for the District of Columbia.....         621,000
                    ========================================================
                    ____________________________________________________
Citywide Call Center (CW0): This creates an independent 
    entity to manage citizen and customer inquires of 
    the District government. This will allow the 
    District to address the majority of residents' needs 
    through one main number and telephone contact. If 
    citizen's concerns are not addressed at first call, 
    then staff can assure the transfer of calls to the 
    correct agency. In fiscal year 2001, the Citywide 
    Call Center is funded by other District agencies 
    through the intra-District funding process..........       1,958,785
                    ========================================================
                    ____________________________________________________
Office of the City Administrator (AE0):
    Funding for the Operational Improvements Division 
      (OID), Risk Management, and Neighborhood Services.       2,772,143
    Increases in federal grant programs and grant 
      management support................................       7,628,821
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................      10,400,964
                    ========================================================
                    ____________________________________________________
Office of Personnel (BE0): An increase for the Employee 
    Assistance Program contract.........................         368,000
                    ========================================================
                    ____________________________________________________
Human Resources Development (HD0): The agency has been 
    targeted to receive $1,042,000, and 9 FTEs to 
    improve the professional and technological skills of 
    D.C. Government employees by offering Customer 
    Service Training, Advanced Computer Training and 
    other development course work through the Skills 
    Development Institute. The Chief Financial Officer 
    will make these funds available upon certification 
    for the District of Columbia........................       1,042,000
                    ========================================================
                    ____________________________________________________
Office of the Chief Technology Officer (TO0):
    The transfer of the SHARE services from the Office 
      of the Chief Financial Officer....................       3,612,162
    This will facilitate centralization of technology 
      support, enhance performance, service delivery, 
      and management throughout the District. OCTO will: 
      (1) implement a District-wide e Government system, 
      a process whereby District agencies can take 
      advantage of the tremendous opportunities which e-
      commerce makes possible; (2) implement a full 
      internet program providing information access to 
      the public via the Internet; (3) coordinate 
      District wide web-based activities; and (4) define 
      and implement technologies for revenue 
      enhancement, productivity improvement, and cost 
      re- 
      duction...........................................       4,426,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       7,680,162
                    ========================================================
                    ____________________________________________________
Office of Property Management (AM0): The agency has been 
    targeted to receive an additional $2,500,000, and 7 
    FIFEs from funds pending certification. These 
    additional funds are for costs to support the 
    Omnibus Real Property Asset Management to allow OPM 
    to perform routine maintenance and other legally 
    required tasks on surplus District owned properties 
    before their disposal. This will also fund the 
    marketing of the available properties to facilitate 
    their sale. The Chief Financial Officer will make 
    these funds available upon certification for the 
    District of Columbia................................       2,500,000
                    ========================================================
                    ____________________________________________________
Office of the Inspector General (AD0):
    Expansion of a Medicaid Fraud Unit. The Mayor has 
      authorized the OIG to submit an application for a 
      federal grant that would provide seventy-five 
      percent of the operating cost for this initiative. 
      Such an application has been completed and 
      submitted. The goals of the Medicaid Fraud Unit 
      will be to prosecute Medicaid fraud, recover 
      monies lost due to false claims, and investigate 
      patient abuse. This request represents the 
      required twenty-five percent local matching amount       1,371,955
    Support of 21 FTEs needed to enhance the agency's 
      audit, inspection, and investigative functions. 
      This request will give the OIG a new level of 
      audit, investigative, and inspections and 
      evaluations coverage throughout the District 
      government. This additional coverage will meet 
      demands that have been placed on the OIG by 
      District leadership. District managers are now 
      faced with risk/management challenges relating to 
      the Mayor's strategic initiatives such as making 
      government work, economic development, and 
      building healthy neighborhoods. In addition, 
      Congress has passed legislation requiring the OIG 
      to audit the District of Columbia Highway Trust 
      Fund. This responsibility was previously with the 
      General Accounting Office.........................       1,349,000
    An increase in other services and charges for costs 
      associated with the Comprehensive Annual Financial 
      Report (CAFR).....................................       1,190,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       3,800,955
                    ========================================================
                    ____________________________________________________
        Grand Total Governmental Direction and Support..      28,496,866
                    ========================================================
                    ____________________________________________________
Business Services and Economic Development (EB0):
    11 planners and eight revitalization and zoning 
      planners: The Neighborhood Action initiative will 
      develop annual strategic plans for each 
      neighborhood cluster that will guide the 
      development of a citywide strategic plan and the 
      allocation of public resources. The revitalization 
      planners will manage complex revitalization 
      studies in many areas throughout the District to 
      promote development and investment in under-served 
      and underutilized neighborhoods and areas. Zoning 
      planners will work on zoning cases to strengthen 
      land use management and provide analysis to 
      support decisions made by the Zoning Commission 
      and the Board of Zoning Adjustment................         548,000
    Supports the following initiatives: (1) providing 
      technical assistance in the operation of the 
      District's contract compliance system; (2) 
      enforcement of the ``Equal Opportunity for Local, 
      Small and Disadvantaged Business Enterprises Act 
      of 1998''; (3) enforcement of the ``Blanket Order 
      Blitz Increased Opportunity for Local, Small and 
      Disadvantaged Business Enterprises Emergency 
      Amendment Act of 1999''; (4) supporting the Penn-
      Branch Mall Business Resource Center; and (5) 
      promoting and marketing the agency's initiatives..         203,200
    D.C. Marketing Center. This initiative expands 
      funding for the D.C. Marketing Center and supports 
      the agency's internal marketing efforts. 
      Internally, the agency plans to produce and mail 
      marketing materials, develop internet-based 
      strategies for marketing the District and 
      responding rapidly to inquiries and a media 
      campaign to advertise the opportunities for 
      business development in the District..............         560,000
    Heritage Tourism to foster heritage tourism in the 
      District and links it with the economic 
      development of the District and its neighborhoods. 
      Heritage tourism is travel directed toward 
      experiencing the arts, heritage, and special 
      character of a place..............................         150,000
    Transfer of the Historic Preservation Review Board 
      from the Department of Consumer and Regulatory 
      Affairs, including nine FTEs......................         768,081
    Transfer of the Industrial Revenue Bond program from 
      the Office of the Chief Financial Officer, which 
      includes seven FTEs. The Industrial Revenue Bond 
      Program supports the implementation of the EZ bond 
      initiative, the public school infrastructure 
      development act, the maintenance of a 
      clearinghouse on local and federal tax incentive, 
      and several other initiatives.....................       1,096,426
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       3,325,707
                    ========================================================
                    ____________________________________________________
Office of Zoning (BJ0):
    Funding of the introductory phase of a zoning 
      database system to provide agency information and 
      access to zoning documents........................         145,000
    Funding for the development, distribution and 
      maintenance of Phase II of the electronic zoning 
      maps that will result in the agency processing 20 
      percent more applications; establishing a web site 
      for zoning information; conducting community 
      outreach seminars.................................         225,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................         370,000
                    ========================================================
                    ____________________________________________________
Department of Housing and Community Development (DB0): 
    The agency has been targeted to receive five FTEs 
    and program support from funds pending 
    certification, for the Land Disposition and Asset 
    Management Unit, the Homestead Housing Preservation 
    Program, and the Main Street Program. The Chief 
    Financial Officer will make these funds available 
    upon certification for the District of Columbia.....       3,296,000
                    ========================================================
                    ____________________________________________________
Department of Employment Services (CF0):
    Increases and new federal grants from the US 
      Department of Labor for:
        (a) Metro Tech Project: Partnership with VA, MD, 
          and D.C. to help relieve the identified 
          distress of high tech labor shortage in the 
          D.C. metropolitan area. The consortium will 
          develop joint policies, collaborative 
          mechanisms, and common objectives to address 
          the needs of displaced workers.
        (b) Youth Opportunity Initiative Grant: A system 
          that established high standards for student 
          achievements and prepares all youth for 
          advanced education, training, and high quality 
          careers. Six focus groups comprised of 
          employers, youth, educators, service 
          providers, and other community members will 
          review issues of self-sufficiency, supportive 
          services, and personal development.
        (c) Adult Training (Title II) and Youth Training 
          (Title III): The grants support programs that 
          prepare youth and adults facing serious 
          barriers to employment for participation in 
          the labor force by providing job training and 
          other services that will result in increased 
          employment and earnings, increase educational 
          and occupational skills, and decreased welfare 
          dependency.
        (d) Dislocated Workers Program (EDWA), the Adult 
          Training Programs (Title 11), Youth Training 
          (Title IIB & IIC, Dislocated Workers Program 
          (EDWA), new Metro Tech Project, and new Youth 
          Opportunity Initiative Grant..................      15,920,000
    The agency is targeted to receive additional funding 
      for the First Source Hiring program. The Chief 
      Financial Officer will make these funds available 
      upon certification for the District of Columbia...         200,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................      16,120,000
                    ========================================================
                    ____________________________________________________
Department of Consumer and Regulatory Affairs (CR0): 24 
    FTEs were added to the local budget to support the 
    agency's programs for Neighborhood Stabilization and 
    Nuisance Abatement Program..........................         818,000
                    ========================================================
                    ____________________________________________________
Office of Banking and Financial Institutions (BI0):
    To accommodate an increase in workload and the 
      hiring of 6 FTEs to support the agency's 
      initiative to strengthen and enforce the 
      District's Banking Laws...........................         316,471
    The Local budget of authority funding, including 5 
      FTEs were transferred to Other Funds resulting in 
      no Local budget authority for the Office of 
      Banking and Financial Institu- 
      tions.............................................         900,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       1,216,471
                    ========================================================
                    ____________________________________________________
        Grand Total Economic Development and Regulation.      25,146,178
                    ========================================================
                    ____________________________________________________
Metropolitan Police Department (FA0):
    The agency will receive funding for the Photo Red 
      Light contract and the implementation of a Cadet 
      Program...........................................       2,900,000
    The agency will implement a Cadet Program to expand 
      the pool of local recruits for MPD................       1,400,000
    During fiscal year 2001, the MPD will receive the 
      Universal Hiring Grant--Community Oriented 
      Policing Services (COPS), a federal grant, which 
      funds 200 additional MPD officers and requires the 
      District to provide a local match.................       5,000,000
    The District will implement an E-911 service fee to 
      partially offset the cost of providing E-911 
      service in the District...........................       3,900,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................      13,200,000
                    ========================================================
                    ____________________________________________________
Fire and Emergency Medical Services Department (FB0):
    During fiscal year 2001, the agency will reinstate 
      Fire Battalion Chief Aides (33 FTEs)..............       1,163,000
    Additionally, the agency will add a fifth person (88 
      FTEs) on ladder truck companies...................       3,200,000
    The agency is funded for additional debt service 
      costs associated with the large number of 
      replacement fire apparatus procured and delivered 
      in fiscal year 2000 and fiscal year 2001. The 
      agency has been targeted to receive an additional 
      $1,293,000 from funds pending certification for 
      these obligations. These additional funds are for 
      the Administrative Division. The Chief Financial 
      Officer will make these funds available upon 
      certification for the District of Columbia........       1,293,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       5,656,000
                    ========================================================
                    ____________________________________________________
District of Columbia National Guard (FK0): Beginning in 
    fiscal year 2001, the agency budget reflects an 
    increase from the transfer of 13 FTEs and 
    corresponding funding from the Department of Defense 
    to federal funds within the District's budget for 
    Facility Operations Maintenance Assistance (FOMA) 
    positions...........................................         506,275
                    ========================================================
                    ____________________________________________________
Office of the Chief Medical Examiner (FX0): Beginning in 
    fiscal year 2001, the Office of the Chief Medical 
    Examiner is reflected as an independent agency. This 
    agency was formerly part of the Department of 
    Health. There are no programmatic changes, only an 
    organizational location change......................       1,216,471
                    ========================================================
                    ____________________________________________________
      Grand Total Public Safety and Justice.............      20,578,746
                    ========================================================
                    ____________________________________________________
District of Columbia Public Schools (GA0):
    The proposed federal grant budget increases over the 
      fiscal year 2000 approved budget for:
        (a) Class Size Reduction........................       5,623,076
        (b) Impact Aid..................................         397,529
        (c) 21st Century Community Learning Centers.....       1,788,094
        (d) Refugee Children School Impact..............         249,849
        (e) Advanced Placement Fee Payment Program......         181,275
        (f) Teachers and Personnel Grants...............         238,022
        (g) Emotionally Disturbed.......................         835,476
        (h) Development and Implementation grants.......         142,889
        (i) Training for All Teachers grants............         157,867
        (j) Other grants and unspecified grants.........       5,662,870
        (k) Increase in projected Medicaid 
          reimbursements for transportation of special 
          education students............................................
    Uniform Per Pupil funding formula increase..........      27,872,449
    Award from Bell Atlantic to wire schools for 
      internet ser- 
      vices.............................................       1,389,531
    Food services transfer federal grant from the U.S. 
      Department of Agriculture.........................      31,014,553
    The agency is targeted to receive additional funds 
      for Special Education non-public tuition payments. 
      The Chief Financial Officer will make these funds 
      available upon certification for the District of 
      Columbia..........................................      12,079,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................      87,632,480
                    ========================================================
                    ____________________________________________________
State Education Office (GD0): Fiscal year 2001 is the 
    first year of operation of the State Education 
    Office (SEO). Its operating budget accommodates 
    start-up costs and one-time expenditures. A plan, 
    which will be developed in fiscal year 2001 by the 
    State Education Officer, will guide the transfer of 
    those state functions and other duties designated 
    from transfer to the SEO............................       1,679,000
                    ========================================================
                    ____________________________________________________
Public Charter Schools (GC0): The increase consists of 
    accommodation of the fiscal year 2000 audited 
    enrollment numbers and forecasted enrollment for the 
    expansion of existing public charter schools (PCS) 
    and projected enrollment for newly established PCS. 
    The two chartering authorities have granted 
    provisional approval for eight (8) new charters in 
    fiscal year 2001 (school year 2000-2001)............      77,115,217
                    ========================================================
                    ____________________________________________________
University of the District of Columbia (GF0):
    Expansion of The Saturday Academy, a pre-college 
      program designed to increase the number of 
      minority students enrolling in college in science, 
      mathematics, engineering, and technology 
      disciplines.......................................         442,000
    A programmatic increase for the Excel-Adult 
      Education Program is a collaboration between the 
      Excel Automotive Training Program and the 
      University's School of Engineering, to provide a 
      mechanism for the upward transition of Excel 
      participants into accredited college level course 
      work and degree programs..........................       1,069,000
    A programmatic increase targeted towards: funds for 
      additional faculty, equipment, and educational 
      resource materials for the Teacher Education and 
      Speech and Language Pathology programs; and a 
      feasibility study on the establishment of a 
      University satellite facility in the East of the 
      River section of the District of Columbia.........       1,129,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       2,640,000
                    ========================================================
                    ____________________________________________________
District of Columbia Public Library (CE0):
    Minor repairs for 8 of the 26 library branches; meet 
      costs associated with the Homework Helpers 
      program; and expansion of the Reach Out And Read 
      (ROAR) program....................................         555,496
    Purchase more books for branch libraries. The 
      proposed fiscal year 2001 budget would expand the 
      ROAR program, which currently provides literacy-
      building services to young children in family 
      childcare homes, to include additional childcare 
      facilities, schools, homeless shelters, and other 
      social services providers.........................         476,504
    The agency is targeted to receive additional from 
      funds pending certification for the Humanities 
      Council at the Libraries and to purchase more 
      books for branch libraries. The Chief Financial 
      Officer will make these funds available upon 
      certification for the District of Columbia........         400,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       1,432,000
                    ========================================================
                    ____________________________________________________
Commission on the Arts and Humanities (BX0): The agency 
    is targeted to receive additional funds pending 
    certification for the Arts in Education Program for 
    Youth. The Chief Financial Officer will make these 
    funds available upon certification for the District 
    of Columbia.........................................         120,000
                    ========================================================
                    ____________________________________________________
      Grand Total Public Education System...............     170,618,697
                    ========================================================
                    ____________________________________________________
Department of Health (HC0):
    The agency is targeted to receive the funding for 
      additional health inspectors and Storm Water 
      Permit compliance from funds pending 
      certification. The Chief Financial Officer will 
      make these funds available upon certification for 
      the District of Columbia:
        (a) Additional Health inspectors in 
          Environmental Health Administration to conduct 
          environmental, food, health, and safety 
          inspections...................................       1,000,000
        (b) Storm Water Permit. This allows the agency 
          to comply with federal law and enforce the 
          storm water permit certified on January 6, 
          2000. Non-compliance with this activity would 
          be in violation of the Clean Water Act. 
          Violation of this act, according to the agency 
          will result in fines of up to $50,000 a day...       1,000,000
    Acceleration of the program to determine the Total 
      Daily Maximum Load (TDML) for various pollutants 
      within the District's rivers. Two field 
      biologists, two laboratory chemists, and equipment 
      necessary to perform this function will be hired. 
      DOH will complete this analysis for D.C. water 
      bodies by fiscal year 2005 rather than fiscal year 
      2011 based on the current schedule................         900,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       2,900,000
                    ========================================================
                    ____________________________________________________
Department of Parks and Recreation (HA0):
    To expand the hours of operation, provide more 
      programs to a diverse population, and enhance and 
      improve the maintenance of parks and facilities...       2,335,050
    The agency is targeted to receive 23 FTEs from funds 
      pending certification, to expand the hours of 
      operation at its recreation facilities. The Chief 
      Financial Officer will make these funds available 
      upon certification for the District of Columbia...       1,511,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       3,846,050
                    ========================================================
                    ____________________________________________________
D.C. Office on Agina (BY0):
    Increase to provide Stipends for Senior Citizens 
      Employment Program. This program will provide 
      senior citizens a stipend to serve in part-time 
      positions throughout the District. It is also 
      assumes that the seniors would be placed in the 
      Offices of the Mayor, City Administrator, Superior 
      Court, the Department of Consumer and Regulatory 
      Affairs, and any other office where their talent, 
      skills, and interests are used in a meaningful way         100,000
    Home Care Services for Senior Citizens to help 
      senior citizens stay in their homes with 
      assistance from homemakers, visiting nurses, and 
      aides, to include support for 60 residents with 
      Alzheimer's disease who continue to live alone....         350,000
    Comprehensive Wellness program for Senior Citizens 
      to prevent chronic debilitating diseases that 
      affect the aging population. It is anticipated 
      that 500 seniors will benefit from this program 
      further. The program will require 10 FTEs in the 
      areas of wellness, nutrition, counseling, physical 
      fitness and other major wellness programs.........         300,000
    The agency is targeted to receive funds pending 
      certification to fund the Caregiver Support 
      Institute to link seniors with information and 
      education. The Chief Financial Officer will make 
      these funds available upon certification for the 
      District of Columbia..............................         574,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       1,224,000
                    ========================================================
                    ____________________________________________________
Public Benefit Corporation Subsidy (JC0): The proposed 
    budget includes an increase to fund the D.C. Public 
    Schools Health Program to be derived from <$874,000> 
    in savings from efficiencies in operations. This 
    program provides nursing services at selected D.C. 
    Public School sites for students in need of medical 
    ser- 
    vices...............................................       1,100,000
                    ========================================================
                    ____________________________________________________
Office of Human Rights (HM0): To hire additional human 
    rights investigators. In fiscal year 2001, 
    significant improvements will be made in the 
    Mediation Program to further reduce pending 
    litigation caseload providing more speedy relief to 
    victims of illegal discrimination. The agency will 
    continue its partnership with the United States 
    Equal Employment Opportunity Commission (EEOC) to 
    further enhance the operation of the office. 
    Additionally, the agency will enter into a new 
    partnership with the United States Department of 
    Housing and Urban Development (HUD) to better 
    address and combat illegal housing discrimination...         300,000
                    ========================================================
                    ____________________________________________________
Office on Latino Affairs (BZ0):
    For the Latino Community Education Program..........       1,000,000
    For the Latin America Youth Center..................         500,000
                    --------------------------------------------------------
                    ____________________________________________________
    The Chief Financial Officer will make these funds 
      available upon certification for the District of 
      Columbia..........................................       1,500,000
                    ========================================================
                    ____________________________________________________
Brownfield Remediation (BR0): A federal payment is 
    earmarked for the assessment and remediation of 
    Poplar Point in Southeast Washington, D.C. The 
    District of Columbia Brownfields Program (D.C.BFP) 
    will administer Brownfield Remediation within the 
    Department of Health (DOH). D.C.BFP activities 
    include collecting environmental, tax, and title 
    information on potential sites to develop a 
    marketable database of Brownfield sites.............      10,000,000
                    ========================================================
                    ____________________________________________________
Children and Youth Investment Fund (JY0): The entire 
    amount will be transferred to the Children and Youth 
    Investment Trust Corporation, which will then 
    disburse funds to community-based organizations that 
    provide services to children, youth, and their 
    families. The budget does not include any funds for 
    personal services or administrative overhead, and it 
    includes no FTEs. The Chief Financial Officer will 
    make these funds available upon certification for 
    the District of Columbia............................      10,000,000
                    ========================================================
                    ____________________________________________________
      Grand Total Human Support Services................      30,870,050
                    ========================================================
                    ____________________________________________________
Department of Public Works (KA0):
    Neighborhood Cleaning Program. This program will 
      allow the Department of Public Works to increase 
      street and alley cleaning and to provide new 
      equipment. Much of the equipment at the Department 
      is at the end of its useful life, which results in 
      constant repairs and consequent scheduling 
      problems. The agency states that through this 
      program (1) Alternative Side of the Street 
      sweeping schedules will be met on a routine basis 
      and (2) Alley cleaning would become more frequent 
      and predictable. The agency predicts that although 
      the total cost of the District's street and alley 
      cleaning program would rise, unit costs would 
      decrease dramatically due to increased 
      efficiencies and productivity. The agency also 
      states that with more frequent and comprehensive 
      service provided, alleys would be cleaned three 
      times more often..................................       1,409,049
    Anti-graffiti Program. This program will provide the 
      District with a viable graffiti program. Graffiti 
      has become an increasingly visible problem. Not 
      only is graffiti unsightly, but it reduces 
      property values, discourages economic development 
      and often is a precursor to crime and further 
      neighborhood decline..............................         600,000
    Solid Waste Transfer Site Selection Advisory Panel. 
      This is will allow the panel to complete its work 
      in the selection of a new trash transfer site that 
      will be environmentally safe for the surrounding 
      community.........................................         100,000
    Tree Trimming. This program will enhance the city's 
      capacity to maintain its trees. This funding will 
      allow for the trimming of 5,000 additional trees..       1,000,000
    The agency is targeted to receive funds pending 
      certification for the Neighborhood Cleaning 
      program. The purpose of this program will provide 
      for significant additional improvements in 
      neighborhood cleanliness. The Chief Financial 
      Officer will make these funds available upon 
      certification for the District of Columbia........       1,500,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       4,609,049
                    ========================================================
                    ____________________________________________________
Department of Motor Vehicles (KV0):
    The local budget to supports the agency initiative 
      to reduce wait time for adjudication and 
      registration and to expand access to services at 
      the Department of Motor Vehicles (DMV). In fiscal 
      year 2001, DMV is proposing a realignment to 
      improve efficiency and effectiveness of operations 
      within the agency and improve service to District 
      residents.........................................       1,176,000
    The agency is targeted to receive funds pending 
      certification to further reduce wait time at the 
      two inspection stations. The Chief Financial 
      Officer will make these funds available upon 
      certification for the District of Columbia........       1,000,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       2,176,000
                    ========================================================
                    ____________________________________________________
D.C. Taxicab Commission (TC0): The agency is targeted to 
    receive funds pending certification for establishing 
    a revolving fund to provide loans to taxicab drivers 
    for security installation. The Chief Financial 
    Officer will make these funds available upon 
    certification for the District of Columbia..........       1,550,000
                    ========================================================
                    ____________________________________________________
Washington Metropolitan Area Transit Author (KE0):
    An increase to fund the opening of the Green Line in 
      Southeast D.C. along with restoration of several 
      bus lines within the District.....................       1,441,000
    An increase for the implementation of Metrorail's 
      late night closing at 2 a.m. on the weekends......       1,100,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total...........................................       2,541,000
                    ========================================================
                    ____________________________________________________
        Grand Total Public Works........................     10,876,049.

    Question. How many uniformed police officers does the District of 
Columbia employ?
    Answer. The Metropolitan Police Department (MPD) has a fiscal year 
2001 authorized strength of 3,800 officers. On June 8, 2000, the MPD's 
on-board strength is 3,590 police officers.
    Question. Of this number, how many are assigned to patrolling the 
District's streets and neighborhoods?
    Answer. Of that number there are 2,481 officers involved in 
District Operations as well as 669 involved in citywide anti-crime 
measures. In addition there are 190 police recruits in the Academy 
(attached is the complete staffing level assignment).
    Question. Has the District taken steps to establish a business 
improvement district in the area of the proposed new Metro station at 
the intersections of New York and Florida Avenues, Northeast?
    Answer. Businesses in the area of the proposed new Metro station 
intend to create a Business Improvement District (BID) by the 
completion of the project in 2004. When businesses submit a BID 
proposal, the District will promulgate legislation to establish the 
BID.
    Question. Please explain to the Subcommittee the source of private 
funds that will constitute a one-third financial Contribution towards 
the total anticipated costs of this project.
    Answer. The District is awaiting receipt of its consultant's 
economic impact study before negotiating the final terms (including the 
amount and structure) of the private contribution to the project. The 
District expects to complete these negotiations by Friday, June 30, 
2000.
    Question. Please provide the Subcommittee with a detailed total 
project cost breakdown for the proposed New York Avenue Metro station.
    Answer. The total for the proposed New York Avenue Metro station is 
$84,000,000. The cost breakdown is as follows:

Preliminary Engineering.......................................$3,000,000
Real Estate................................................... 4,000,000
Utilities..................................................... 1,250,000
Systemwide....................................................19,000,000
Fare Collection Equipment..................................... 2,750,000
Design/Construction...........................................37,000,000
WMATA Proj. Management........................................ 7,500,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Subtotal................................................74,500,000
Insurance (8 percent)......................................... 4,800,000
Contingency (7 percent)....................................... 4,700,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total Expenditures......................................84,000,000

    Question. The Fiscal Year 2000 Appropriations Act for the District 
of Columbia, Public Law 106-113, contained $5,000,000 in Federal 
funding for the District to develop a program for adoption incentives 
for foster children. Please provide a complete accounting on the use of 
these funds. Please provide a detailed project description for the 
adoption incentives program developed by the District with the funds 
Congress appropriated.
    Answer. The Mayor submitted a plan (attached) to the City Council 
that targeted four areas of adoption incentives. The Mayor's plan 
would:
    (1) Create a flexible fund to support adoptions of siblings and 
other hard to place children that would include home renovations to 
accommodate wheelchair access and other special needs
    (2) Create an adoption resource center and post-adoption services 
to provide ongoing support and education for new foster parents.
    (3) Provide funds to enhance the current Children and Family 
Services Administration recruitment efforts.
    (4) Establish a scholarship fund to support transition to 
independence for adopted teens for high school as well as post-
secondary education.
    The Council has chosen to split the money and spend $3 million on 
provisions in the Mayor's plan and $2 million on a voucher program to 
pay lawyers and conduct home studies.
    Question. The District's fiscal year 2000 approved budget included 
$7,000,000 in management reform productivity savings, and the fiscal 
year 2001 budget includes a projected $37,000,000 in productivity 
savings for fiscal year 2001. Please provide a complete accounting, 
including project and program descriptions, and the associated savings 
of each for the $7,000,000 in fiscal year 2000 savings.
    Answer. We have already saved approximately $1.0 million as a 
result of an audit of unused telephone lines and unnecessary service 
options this year. We project achieving additional productivity savings 
by recouping Medicaid reimbursements that the D.C. Public Schools 
Special Education division has historically failed to pursue and 
through better management of disability claims throughout District 
government agencies. Further savings will come from cell phone account 
management, energy savings and one-time revenue from vehicles 
identified for disposition in the District-wide Fleet Management 
initiative launched in June 2000.
    Question. The District's s fiscal year 2000 Appropriations Act 
included an appropriation of $18,000,000 in Control Board interest 
funds for the District to use for managed competition. Please provide 
the Subcommittee with a detailed accounting of how these funds have 
been spent.
    Answer. The appropriation totaling $18,000,000 has not been 
expended to date. The funds will cover retirement incentive payments to 
those District employees who elect to retire under this retirement 
incentive program by July 14, 2000.
    Question. Please provide the Subcommittee with a detailed breakdown 
of any and all severance payments, by position, paid to District 
employees pursuant to Section 157 of the Fiscal Year 2000 D.C. 
Appropriations Act.
    Answer. The breakdown of severance payments paid to District 
employees pursuant to Section 157 will be available after July 14, 
2000. The breakdown will be provided to the Subcommittee soon 
thereafter.
    Question. Please provide the Subcommittee with a copy of the 
managed competition plan agreed to by the Mayor and District Council 
pursuant to Section 157.
    Answer. The managed competition plan is currently being negotiated 
with collective bargaining unit representatives. This plan will be 
submitted to the Subcommittee upon its execution.
    Question. The District's budget proposal for fiscal year 2001 
itemizes $10,000,000 in operational improvement savings. Please provide 
the Subcommittee with a list of any and all programs you have 
identified for operational improvement savings, along with the amounts 
of operational improvement savings anticipated for each. Please provide 
a complete projected accounting of the $37,000,000 anticipated 
management reform productivity savings for fiscal year 2001.
    Answer. The Williams Administration is committed to making the 
District government more efficient. To that end, we have taken steps to 
ensure that savings targets projected for fiscal year 2001 are both 
realized and recurring. The Office of the City Administrator is 
developing a plan to track and secure the $47 million in productivity 
savings projected for fiscal year 2001 so savings will begin to be 
captured at the outset of the fiscal year. The largest source of these 
savings will be a workforce reduction of up to 1,000 employees through 
the elimination of long-standing funded vacancies and attrition through 
regular and early retirement during fiscal year 2000. While there will 
be expenses associated with achieving these workforce reductions during 
fiscal year 2000, the projected fiscal year 2001 savings are up to $37 
million. Additional areas targeted for savings include better 
management of disability claims; additional Medicaid reimbursements the 
District has historically failed to pursue; eliminating unused 
telephone lines and extra service options on active lines; and 
cellphone account management.
                                 ______
                                 

                                District of Columbia, June 6, 2000.
Hon. Linda Cropp,
Chairman, Council of the District of Columbia, Washington, DC.
    Dear Chairman Cropp: I request that Title XXXVIII of the Fiscal 
Year 2001 Budget Support Act of 2000 (Bill 13-679) be amended to 
reflect the recommendations made by the Mayor's Advisory Council on 
Permanent Homes for Children. Congress, through the Appropriations Act 
of 2000, authorized a federal payment for incentives for the adoption 
of children in the District of Columbia. The Act provides for a one-
time payment of $5 million to support this objective. The 
recommendations, which I support were made by the Mayor's Advisory 
Council on Permanent Homes for Children in consultation with numerous 
adoption advocacy groups throughout the District. The amendment being 
moved by Council Member Allen this morning at the Legislative Meeting 
reflects these recommendations. A copy of the recommendations is 
enclosed.
            Sincerely,
                                       Anthony A. Williams,
                                                             Mayor.
                                 ______
                                 
                                                 February 24, 2000.
Hon. Anthony Williams,
Mayor of the District of Columbia, Washington, DC.
    Dear Mayor Williams: Enclosed for your review and approval is a 
proposal for the use of federal adoption incentive funds for the 
District of Columbia that has been developed at your request by the 
Mayor's Advisory Committee on Permanent Homes for Children.
                               BACKGROUND
    As part of the consolidated Appropriations Act of 2000, the 
Congress authorized a federal payment for incentives for adoption of 
children in the District of Columbia. As outlined in the conference 
report:
  --The Act authorizes a one-time federal payment of $5 million to 
        create incentives to promote adoption.
  --Funds under this authorization must be used by September 30, 2001.
  --A program must be established by the Mayor and the District Council 
        and approved by the Appropriations Committees of House and 
        Senate.
  --The funds may be used for tax credits to offset costs incurred by 
        individuals in adopting (requires legislation).
  --The funds may be used to provide for health care needs of such 
        children (requires legislation).
    At its December meeting, the Mayor's Advisory Committee on 
Permanent Homes for Children established a subcommittee composed of 
Toni Oliver, Judith Meltzer, Mae Best, Phyllis Langston, Gwen Menefee 
and Liz Siegel and asked them to propose a plan for use of the federal 
funds.
    The Committee has gathered ideas on adoption needs and resources 
from others in the community; reviewed ideas for adoption incentives 
from other jurisdictions, and researched the feasibility and costs of 
proposals that surfaced. A draft plan was shared with the full Advisory 
Committee in early January and comments and suggestions for change were 
solicited. The Committee reviewed all written and verbal comments and 
revised the plan accordingly.
                            PROPOSAL SUMMARY
    As a result of this work, the Committee is proposing that the 
federal adoption funds be focused on the overarching goal of providing 
loving and permanent homes for the District's children in the District 
of Columbia. The overall plan for the incentive funds is targeted 
toward five measurable outcomes:
    Outcome 1.--Increase the number of families in the District of 
Columbia who are willing and able to adopt children currently in the 
District's foster care system.
    Outcome 2.--Decrease the disruption rate for adoptions of children 
with special physical or emotional needs.
    Outcome 3.--Increase the rate of adoption of teens in foster care 
whose permanency plan is adoption.
    Outcome 4.--Increase the rate of adoption for sibling groups in 
foster care whose permanency plan is adoption.
    Outcome 5.--Achieve compliance with the outcomes for permanency for 
children specified by the federal government under the Adoption and 
Safe Families Act (ASFA).
    The proposal which follows includes four interrelated initiatives 
that together total $5 million to be spent between now and September 
30, 2001. The majority of funds would be contracted out to private 
organizations to conduct the work. The four initiatives include:
    1. Creation of a Flexible Fund to support adoptions of sibling 
groups and other hard to place children.
    2. Establishment of a Scholarship Fund to support transition to 
independence for adopted teens.
    3. Creation of an Adoption Resource Center(s) and Post-Adoption 
Services Capacity.
    4. Enhancement of recruitment and support of District foster and 
adoptive familities.
    A fuller description of each of the proposed initiatives and 
estimated costs based on two years of implementation is presented in 
the attached proposal.
    plan for management and oversight of the adoption incentive plan
    The Committee proposes that overall management of the initiative 
will be the responsibility of the Deputy Mayor for Children's Services 
but that day to day coordination and implementation of the adoption 
incentive initiatives be assigned to the Child and Family Services 
Administration which is the agency responsible under District law for 
the work associated with providing permanent homes for children who are 
in the custody of the District of Columbia because of parental abuse or 
neglect. Several of the initiatives would involve one or more contracts 
with private organizations to carry out the work. CFSA would be 
accountable to the Deputy Mayor for Children and Families for 
reporting, evaluation and fiscal accountability on each initiative. 
General oversight of the Adoptive Incentive Plan would also be provided 
by a standing subcommittee of the Mayor's Advisory Committee on 
Permanent Homes for Children. Regular reports would be made to the 
Committee on progress in meeting measurable objectives. In addition, 
the plan includes a provision for a small amount of funds to be set-
aside for an external evaluation of the effectiveness of the proposed 
adoption incentive initiatives. A contract would be let with an 
independent external evaluator to design and conduct necessary data 
collection and evaluative studies under the direction of the Mayor's 
Committee and/or the Deputy Mayor for Children's Services.
                               NEXT STEPS
    Under the terms of the authorizing legislation, the plan for the 
use of these funds must be approved by the Mayor and the District 
Council and then approved by the Appropriations Committees of the House 
and the Senate. We are hopeful that you will approve the proposed plan 
and take the lead in forwarding it to the District Council for their 
approval. Members of the Mayor's Advisory Committee would be glad to 
assist your staff in making any necessary presentations on the 
proposals in order to secure Council approval.
    Once District Council approval is obtained, the Advisory Committee 
would again be willing to work with you and your staff in presenting 
the plans to the Congressional Appropriations Committees in hopes that 
their quick approval can be obtained.
    On behalf of the Mayor's Committee, we hope that the work necessary 
to translate this proposal to reality can occur expeditiously. There 
are far too many waiting children in the District of Columbia. We stand 
ready to assist you in any way possible.
            Sincerely,
                                   Mae Best,
                                   Phyllis Langston,
                                   Gwendolyn Menefeee,
                                   Judith Meltzer,
                                   Toni Oliver,
                                   Elizabeth Siegel,
                      Subcommittee on the Adoption Incentives Plan.
                                 ______
                                 
   PROPOSAL TO THE MAYOR'S ADVISORY COMMITTEE ON PERMANENT HOMES FOR 
  CHILDREN ON A PLAN FOR USE OF THE FEDERAL ADOPTION INCENTIVES FUNDS

                               BACKGROUND
    As part of the consolidated Appropriations Act of 2000, the 
Congress authorized a federal payment for incentives for adoption of 
children in the District of Columbia. As outlined in the conference 
report:
  --The Act authorizes a federal payment for $5 million to create 
        incentives to promote adoption.
  --Funds under this authorization must be used by September 30, 2001.
  --A program must be established by the Mayor and the District Council 
        and approved by the Appropriations Committees of House and 
        Senate.
  --The funds may be used for tax credits to offset costs incurred by 
        individuals in adopting (requires legislation).
  --The funds may be used to provide for health care needs of such 
        children (requires legislation).
    At its December meeting, the Mayor's Advisory Committee on 
Permanent Homes for Children established a subcommittee composed of 
Toni Oliver, Judith Meltzer, Mae Best, Phyllis Langston, Gwen Menefee 
and Liz Siegel and asked them to propose a plan for use of the federal 
funds.
    The Committee has met three times in the last month to brainstorm 
ideas, review ideas for adoption incentives from other jurisdictions 
and gather information on adoption needs and resources from others in 
the community.
    After considerable work and refinement, the Committee is proposing 
that the program for use of the funds include four initiatives that 
together total $5 million to be spent between now and September 30, 
2001. The four initiatives include:
    1. Creation of a Flexible fund to support adoptions of sibling 
groups and other hard to place children.
    2. Establishment of a Scholarship fund to support transition to 
independence for adopted teens.
    3. Creation of an Adoption Resource Center(s) and Post-Adoption 
Services Capacity
    4. Enhancement of CFSA Recruitment and Support of District Foster 
and Adoptive Families
    Each of the proposed initiatives and estimated costs based on two 
years of implementation is presented below.
                             proposed plan
1. Creation of a Flexible fund to support adoptions of sibling groups 
        and other hard to place children
    Problem addressed.--Many parents who would be willing and are 
capable of becoming adopted parents are discouraged from doing so 
because of their inability to meet certain requirements related to 
physical space, conditions in their home, or the need for 
accommodations or special equipment for children with handicaps or 
large sibling groups. Access to a funding source for some of these 
needs would provide a significant incentive toward adoption.
    Proposal.--A flexible fund would be established which could be 
accessed by families interested in adoption in order to provide needed 
funding and/or resources for a range of activities/items necessary to 
become an adoptive parent. The kinds of things eligible for 
reimbursement/payment through this fund would include:
  --home renovations to accommodate wheelchairs or other special needs 
        of children;
  --assistance in lead paint abatement when the presence of lead paint 
        is an obstacle to approval of the adoptive home;
  --assistance in paying the cost of FBI fingerprinting necessary for 
        approval as an adoptive parent;
  --equipment to care for disabled children (e.g., beds, durable 
        medical, equipment (and specialized items not covered by other 
        public programs);
  --assistance to needy families who have uncovered costs related to 
        mental health care for children with special needs. Funds would 
        be administered only to families with demonstrated financial 
        need according to a sliding scale;
  --purchase of a wheelchair equipped van to enable adoptive parent(s) 
        to accept children with physical handicaps;
  --assistance with home renovations, down payments or purchase of 
        homes to allow families to adopt large sibling groups. 
        Consideration will be given to purchase of homes for sibling 
        groups of five or more;
  --assistance with miscellaneous expenses in accordance with a plan 
        approved by the agency to promote the ability and willingness 
        of parents to adopt children with special needs or large 
        sibling groups;
  --other approved expenses to promote adoption for which no other 
        funding source exists.
    Estimated Cost.--$1.5 million ($750,000 per year for 2 years).
2. Establishment of a Scholarship fund to support transition to 
        independence for adopted teens
    Problem.--One of the major barriers to adoption of school age and 
teenage children is the lack of resources for adoptive parents to 
support education and training of children as a transition to 
independence.
    Proposal.--A scholarship fund would be established which could be 
accessed by adoptive families for post high school education and 
training for their adopted children. Upon presentation of documentation 
of acceptance at a Junior College, university or postsecondary 
occupational or training school, adoptive families would be eligible to 
receive a scholarship of up to $8,000 per year for a high school 
graduate going to college and up to $3,000 per year for high school 
graduates entering post-secondary training. This fund could be 
established by placing an earmarked amount per child in an interest 
earning account at the time of the child's adoption. The scholarship 
fund would be administered through a private non-profit organization.
    Estimated Cost.--The fund would be established initially with $1.6 
million in an interest bearing account. Cost assumptions are based on 
granting up to 130 scholarships per year for two years. Interest 
generated by the fund and additional fund raising would occur to 
stabilize the fund for the future.
3. Creation of an Adoption Resource Center(s) and Post-Adoption 
        Services Capacity
    Problem.--One barrier to adoption is the fear of prospective 
adoptive parents that they will not be supported when and if problems 
arise. Experience around the country has shown that the development of 
adequate post-adoption support resources is a significant incentive to 
adoption.
    Proposal.--Funds would be used to establish a private Adoptive 
Family Resource Support Center in the District of Columbia to provide 
ongoing information, education and support to adoptive families. Some 
of the activities to be carried out by the resource center will 
include: operation of a hot line for questions, information and 
referral; development and dissemination of and information and referral 
directory of services and supports in the metropolitan area; creation 
and operation of a resource lending library for adoptive parents and 
children; conduct of training programs developed in concert with 
adoptive parents to meet their needs; development and assistance to 
adoptive parent support groups, etc., and therapeutic services related 
to adoption. The Support Center would also have funds to provide 
scholarships for adoptive children and families to participate in 
training provided by national or regional support groups or 
associations.
    The Committee proposes that an RFP be developed outlining the 
Adoption Resource and Support activities that are desired and that an 
organization be funded to develop those activities for the District, 
either by creating a single resource center or by developing and 
coordinating programming that could be made available through 
neighborhood family support centers proposed in the Mayor's Safe 
Passages initiative.
    As an adjunct to the Support Center(s), it is also proposed that a 
small portion of the funds be allocated to CFSA to enhance their post-
adoption services capacity and to enable their staff to link families 
with the Resource Center and other adoptive support opportunities 
(e.g., family conferences, training, etc.).
    Estimated Cost.--$1 million (Resource Center $775,000 for 2 years 
and $225,000 for CFSA post-adoption support activities for families).
4. Enhancement of CFSA Recruitment and Support of Foster and Adoptive 
        Families
    Problem.--The majority of adoptive families begin as foster 
parents. Expanding the pool of adoptive families means expanding the 
recruitment and support of foster parents as well as doing more 
community and neighborhood recruitment of adoptive families. CFSA has 
been hampered in its efforts to expand its recruitment and support 
activities by a lack of funds to support the staff who are doing 
recruitment and to enable CFSA to use foster and adoptive parents as 
team members in the recruitment process.
    Proposal.--Part of the incentive plan involves providing funds to 
support critical staff enhancements and activities within the Adoptions 
Unit of CFSA. Funds would be made available to provide for additional 
CFSA capacity to expand after hour's recruitment activities and to make 
it possible for foster and adoptive parents to serve as co-leaders in 
training. As part of the enhanced recruitment effort, incentive funds 
would be used to pay for:
  --adoptive parents to serve as co-leaders in pre-service training;
  --food for parents attending training sessions;
  --child care for adoptive parents attending training sessions;
  --inviting furnishings and decorations for the rooms where adoptive 
        parent training is held;
  --additional supplies for adoptive home recruitment including a video 
        recorder and cameras, printing of brochures, displays for 
        literature and banners for use at recruitment events and an 
        equipped mobile van which can be taken to a wide range of 
        community events to promote becoming foster and adoptive 
        parents;
  --the preparation of Life Books for all adoptive children;
  --transportation funds for visitation between prospective adoptive 
        families and children when interstate adoptions are planned;
  --expenses associated with participation in adoption exchanges.
    Estimated Cost.--$900,000 ($450,000 per year).
          management and oversight of adoption incentive plan
    The sub-committee proposes that oversight responsibility for the 
Adoption Incentives Plan be placed in the Mayor's Office and that the 
Advisory Committee on Permanent Homes for Children play an ongoing role 
in accountability, assessing the effectiveness of the proposed 
initiatives once implemented. The Mayor's Office would assign 
responsibility for day-to-day implementation of the programs to 
appropriate District agencies, most likely CFSA, with requirements for 
reporting, evaluation and fiscal accountability.
    Efforts would begin simultaneously to seek private and other 
funding to sustain successful initiatives beyond the two years of this 
federal funding opportunity.

                  NEXT STEPS AND PROPOSED TIME FRAMES
    Presentation of Draft to Committee--January 6, 2000
    Comments back to Committee--January 14, 2000
    Revised Proposal to Mayor--January 21, 2000
    Final Plan to Mayor's Committee on Permanent Homes for Children--
February 3, 2000
    Mayor Transmits Plan to District Council for approval--February 14, 
2000
    Mayor and Council jointly transmit approved District Plan to 
Congress for approval--February 28, 2000
    Implementation Begins--April 1, 2000
                                 ______
                                 
 AMENDMENT TO THE BILL 13-679, THE FISCAL YEAR 2001 BUDGET SUPPORT ACT 
                                OF 2000
    Sec. 1. Change the name of title XXXVIII to the ``Approval of 
Adoption Incentives Plan of 2000.''
    Sec. 2. Delete sections 3801 through 3808.
    Sec. 3. Insert the following:
    Sec. 3801. This title may be cited as the ``Approval of Adoption 
Incentives Plan of 2000.''
    Sec. 3802. The Council hereby approves the Proposal to the Mayor's 
Advisory Committee on Permanent Homes for Children on a Plan for Use of 
the Federal Adoption Incentives Funds.
    Sec. 3803. The Proposal includes four initiatives:
          1. Creation of a flexible fund to support adoptions of 
        sibling groups and other hard to place children.
          2. Establishment of a scholarship fund to support transition 
        to independence for adopted teens.
          3. Creation of an Adoption Resource Center and post-adoption 
        services capacity.
          4. Enhancement of CFSA recruitment and support of District 
        foster and adoptive families.

                              AMENDMENT 2
               in the council of the district of columbia
    DATE: June 6, 2000
    Amendment offered by Councilmember Sandra C. Allen
    To: Bill No 13-679
Version:
    Introduced....................................................
    Committee Print...............................................
    First Reading.................................................
    Amended First Reading.........................................
    Engrossed.....................................................     X
    Enrolled......................................................
    Unidentified..................................................

    Title XXXVIII Page 132
    Line 17--Add Section 3803.1 This section may be cited as the 
``Approval of Adoption Incentives Plan of 2000.''
    Add section 3803.1 ``The Council hereby approves the proposal of 
the Mayor's Advisory Committee on Permanent Homes for Children plan for 
use of $3 million of the District of Columbia Appropriations Act of 
2000 to fund the Adoption Incentives Plan of 2000. At least half of 
this $3 million shall be used to establish an Adoption Assistance Fund 
to provide needed funding for a range of items including, but not 
limited to, assistance with home renovations, down payments or purchase 
of homes to allow parents to adopt large sibling groups or special 
needs children, assistance in lead paint abatement when the presence of 
lead paint is an obstacle to approval of the adoptive home, and 
assistance to needy families who have uncovered costs related to mental 
health care for children with special needs. The remainder of these 
funds shall be used to fund the following three initiatives:
    1. Establishment of a scholarship fund to support transition to 
independence for adopted teens.
    2. Creation of an Adoption Resource Center and post-adoption 
services capacity.
    3. Enhancement of CFSA recruitment and support of District foster 
and adoptive families.
    Rationale: This amendment will allow $3 million of the $5 million 
appropriated to the District of Columbia Appropriations Act of 2000 to 
fund the proposal of the Mayor's Advisory Committee on Permanent Homes 
for Children to use the Federal Adoption Incentives Funds. $2 million 
will also be available to fund the ``Adoption Voucher Fund Act of 2000.
                                 ______
                                 

            Questions Submitted by Senator Richard J. Durbin

    Question. I would appreciate hearing your reaction to the Casey 
Foundation findings and how your ``Safe Passages'' agenda and proposed 
spending plan for children, youth, and families and health would help 
to address the specific needs reflected in the report findings.
    Answer. From the beginning of the Williams administration, children 
have been a top priority. Mayor Williams' Safe Passages Initiative 
represents the administration's primary vehicle for tackling the 
negative outcomes that impact the quality of life, safety, health, and 
wellbeing of children in the District. Safe Passages has five main 
goals:
    1. All children are ready to learn.
    2. All children are succeeding in school.
    3. All youth are developed into productive adults.
    4. All children and their families are healthy.
    5. Youth and youth violence is reduced, particularly in school 
settings.
    In the past year, we have experienced significant declines in the 
areas of infant mortality and teen birth rates, the latter of which has 
earned the District a federal bonus of $20 million for its efforts at 
lowering births to teens. Still, much remains to be done to tackle many 
of the seemingly intractable issues that beset children and youth in 
the District.
    The Williams administrative has implemented strategic initiatives 
to support each of the Safe Passages goals. To support Goal 1, more 
than 30 percent of our TANF funding is devoted to providing age-
appropriate child development opportunities for infants, toddlers and 
school children. For Goal 2, the administration provided full funding 
to DCPS schools in order to improve educational opportunities for 
District schoolchildren. Goal 3, targets the positive development of 
our young people, and the administration has launched its largest 
Summer Youth Employment program to date, and expanded career 
internships and year-round job opportunities for eligible students. 
Goal 4 seeks to ensure that all children and their families are 
healthy, and the administration has worked aggressively to expand 
health coverage for children and expectant mothers. Goal 5, targeting 
youth on youth violence, has led to the development of a Juvenile 
Justice Commission to advise the Mayor on policy options and best 
practices for continuing to decrease the rate of juvenile crime, while 
exploring the most effective options for ensuring accountability with a 
focus on prevention and rehabilitation.
    Additionally, the Mayor developed the Children and Youth Investment 
Trust Corporation, a public-private non-profit organization, designed 
to provide financial support for community-based programs providing 
out-of-school time programs for children and youth in the District. 
First year funding for the Trust Corporation totaled $12 million.
    Question. What has been accomplished in the last year to improve 
the quality managers in District agencies, especially those serving 
children?
    Answer. The administration has implemented a government-wide 
performance management system to set standards and monitor performance 
among agency managers. All agency directors, senior agency staff, and 
Executive Office of the Mayor Excepted Service personnel are required 
to develop and adhere to individual performance plans that govern 
performance and evaluation. Furthermore, the Management Support 
Services (MSS) program has been implemented that transfers former non-
union career service managers into the MSS system thus making them `at 
will' employees. The MSS program provides for salary enhancements to 
former career service managers in exchange for their agreement to enter 
into performance contracts with clearly defined goals and evaluation 
standards. These efforts impact all government agencies, including 
managers in the human service agencies.
    Question. Child and family services (including foster care) and 
mental health are in receivership and beyond your direct control. Are 
you prepared to take on the management challenges of these agencies?
    Answer. The operations of both the Child and Family Services Agency 
(CFSA) and the Commission on Mental Health Services (CMHS) are in 
federal court imposed receivership. The District of Columbia will be 
prepared to assume control over the operations of both agencies during 
the transition process back to our government. Pursuant to court order, 
the first agency to transition back to our control is the Commission on 
Mental Health Services. We are currently working collaboratively with 
the Transitional Receiver, and other key stakeholders, on comprehensive 
transition planning. A manager who will work closely with all impacted 
agencies and members of my executive staff is coordinating the planning 
and implementation. The transition planning includes a cross-agency 
analysis and is based on an incremental approach to the transition 
process. It is our expectation that this transition process will form 
the template for a transition model that can be replicated, at least in 
part, at the time CFSA transitions back to government control.
    Question. How would you propose to improve management in District 
schools?
    Answer. As you know, in the District a disproportionate level of 
funding goes to transportation and placement of special needs students 
in private programs and transportation. The city has made some strides 
in recent years, but we still face a budget that is far out of line 
with reasonable costs and a program that leaves many parents and 
students ill-served. We must do much better. A solid, thoughtful 
approach to this requires people on the Board who can grapple with 
these tough questions and look to other jurisdictions for best 
practices. The Board of Education must develop precise goals and 
performance standards for special education reform, and then hold the 
Superintendent accountable for achieving them. Clearly, one of the 
profound problems is that the administrative apparatus--contracting, 
procurement, personnel, and financial management--to guide the program 
is broken. I expect the Board will provide sufficient oversight of 
these support systems, as well as proceed with immediate programmatic 
improvements that will ensure that students are well-served. Over the 
long term, we must continue ensuring that special needs students are 
placed in appropriate environments while transitioning as many students 
as is feasible to programs administered by DCPS and DC charter schools.
    Question. Mayor Williams, Chairman Cropp, and Dr. Rivlin, what is 
the status of the proposal to provide authority to the Mayor to appoint 
school board members?
    Answer. The referendum was held in late June and approved by the 
voters.
    Question. How can we align authority and responsibility for 
District schools? Right now it is hard to say who is responsible. Is it 
the Control Board? Is it the School Board? The Council? The Mayor? Who 
takes credit or blame for progress or the lack of progress? Now that 
Mrs. Ackerman is departing it is even more clear that we need some 
continuity of responsibility. How are we going to get it?
    Answer. One of the perpetual challenges for the school system has 
been a diffuse accountability structure. I am confident that the new 
Board of Education proposal will ameliorate the situation. Ultimate 
responsibility for the school system remains with the Board of 
Education, which will be transformed into a policymaking body removed 
from the micromanagement that created havoc in the school governance 
structure. The Council still had budgetary and oversight 
responsibilities. The executive branch must also be a key partner, 
offering assistance and encouragement to the Board and Superintendent. 
Indeed, a number of executive agencies provide critical support to the 
school system. I have instructed my whole cabinet to do whatever they 
can to meet the needs of the school leadership.
    Question. On April 8, the Washington Post reported that student 
enrollment has declined from about 79,000 students in 1996 to 71,000 
this year. During that period, the school budget has increased from 
$600 million to $717 million. Next year, enrollment is projected to 
drop to about 658,000 while school spending under the budget requested 
by D.C. Mayor Anthony A. Williams will increase by $100 million. Can 
you explain this decline in enrollment/increase in spending phenomenon?
    Answer. For several years schools were underfunded. The budget 
adopted for fiscal year 2001 provides no more funds than schools would 
receive under the ``per pupil funding formula.'' In previous years the 
Mayor and Council had underfunded schools, forcing DCPS leadership to 
divert funds from priority areas such as academic programs to costs 
associated with legal mandates for other programs, including special 
education. I believe that the current funding level is in-line with 
other urban jurisdictions, and I will be working with the Board of 
Education and Superintendent to ensure that these funds result in 
meaningful improvements for our children.
    Question. Mayor Williams, if D.C. schools aren't equipped to 
deliver the special education services to the students needing them, 
when will they be? What will it take? Is the reported $30,000 per 
student tuition the District of Columbia currently spends to educate 
D.C. special education students in private or out of State educational 
settings accurate? What's being done to reduce the costs of educating 
these students outside the DCPS system?
    Answer. On average, I believe that this estimate of $30,000 is 
correct. The cost per student for special education varies considerably 
depending on the child's Individualized Education Plan (IEP), so 
sometimes this number is much more and sometimes much less.
    DCPS has outlined a multi-part strategy to address this concern. 
First, they are developing new programs, including a city-wide 
inclusion program at Hardy and Taft Schools and new early childhood 
programs at 20 other schools. Second, they have indicated that they are 
better monitoring non-public schools and enforcing residency 
verification to get non-eligible students off of the rolls. Finally, 
they are aggressively seeking means to reduce transportation costs.
    As I suggested, these are proposed strategies and I will be looking 
for the Board of Education to track how these approaches are working. I 
also know that our new Superintendent is committed to needed reform and 
will be unveiling more aggressive strategies for reducing these costs, 
this fall. His office proposed, just this week, a plan to offer parents 
the option of transporting their children in exchange for a stipend, at 
less than what it costs the District per student. This may only be an 
option for certain parents, and its viability needs to be evaluated 
further, but it will at least serve as a stopgap until more 
sophisticated measures are developed shortly. I will be looking to our 
Superintendent for leadership on this issue in the near and the long 
term.
    Question. Last year, Mayor Williams and Chairman Cropp, you both 
mentioned the criminal justice coordinating committee. What do you each 
feel are the major accomplishments of this committee over the last 
year?
    Answer. I would list the major accomplishments as follows:
    Development of CJCC team scorecards with goals and milestones in an 
effort to increase accountability.
    Creation of a process baselining program that defines activities 
and identifies the drivers that contribute to police officer overtime 
in court. From these information sources initiatives were developed to 
reduce the identified tasks which most contribute to excessive officer 
time in court. The following represent several core initiatives: 1. 
Metropolitan Police Department/Office of Corporation Counsel Papering 
Reform Project; 2. Diversion Analysis; 3. Court Scheduling/Case 
Processing Reforms; 4. Data Analysis of Officer Involvement in Trial 
Proceedings.
    Creation of the Drug Team in early Spring, 2000 whose main priority 
is offering drug treatment and drug testing to all persons within the 
justice system who are in need. Key components include: 1. Pilot 
program currently in three PSAs; 2. Developed baseline of eight 
populations targeted (i.e. parolees, probationers, and pre-trial 
defendants); 3. Development and supply of non-sanctions based treatment 
slots; 4. Implementation of performance measures for each population; 
5. Began actual drug testing in pilot area; 6. Secured and funded 
outside research organization to evaluate efficacy.
    Creation of the Geo-Mapping Project as a concerted effort to 
support the PSA program in identifying hot-spots, parolee and 
probationer residencies, poverty statistics, and other relevant public 
safety and community initiatives. Highlights include: 1. Supplied the 
Metropolitan Police Department (MPD) with resources to expand and 
enhance existing GIS capabilities; 2. Catalogued all geocoded data 
elements and sources; 3. Developed plan for centralizing all relevant 
geocoded data within (MPD); 4. Procured and supplied to MPD a master 
index of geocoded data; 5. Produced specs and supplied data for geomaps 
to support the Drug Team initiative; 6. Implemented automated data 
transfers from other agencies of geocoded database; 7. Established 
structure, missions & goals for Information Technology Activities 
Committee.
    Creation of the Pre-Trial Services Sub-Committee in response to 
inadequate supervision of detainees in halfway houses and work release 
programs. Program goals focus on improving the management of pre-trial 
offenders and minimizing risk to the community while protecting 
defendants' rights. Areas of concentration include:
Halfway Houses:
    1. Secured no cost technical assistance and contractor support 
through the National Institute for Corrections;
    2. Implemented immediate improvements in the response to 
abscondances;
    3. Decreased time period to secure arrest warrants for ``Walk-
aways'' from 7 days to less than 24 hours;
    4. Conducted an operational audit using American Correctional 
Association standards;
    5. Reassessed halfway houses to determine continuity and 
effectiveness of operational reforms;
    6. Development of the District-wide Escape Monitoring System.
Pre-Trial Risk Assessment Instruments:
    1. Developed tools for measuring risk to the community;
    2. Developed tools for measuring risk of flight for each pretrial 
defendant;
    3. Collected risk assessment instruments from other jurisdictions;
    4. Convened focus group to develop new assessment tool;
    5. Target for full implementation of the Pre-Trial Risk Assessment 
Tool, January 2001.
Alternative Sanctions:
    1. Completed preliminary research on alternative sanctions through 
best practices in other jurisdictions;
    2. Formed focus group to investigate and present recommendations.
Fingerprinting & positive identification
    1. Identified fingerprinting as a critical issue in the reform 
effort;
    2. Researched thirteen other jurisdictions to identify best 
practices;
    3. Outlined needed reforms;
    4. Developed adult baseline of DC fingerprinting practices;
    5. Developed comparative model for fingerprinting;
    6. Recommended that adult fingerprinting be expanded to eight 
additional charges;
    7. Analyzed juveniles separately;
    8. Concluded that major characteristics of DC's juvenile finger 
printing and information management are in the line with other 
jurisdictions.
    Development and implementation of information technology activities 
focusing on the ability to access and share information about offenders 
and their cases. The following projects and initiatives represent a 
first time success within the justice community in overcoming the 
technology integration problems that have persisted within the District 
for decades.
    1. Established governance structure, documented a mission and goals 
for ITAC and working groups;
    2. Secured federal funding for integration project;
    3. Hired information technical liaison officer;
    4. Reviewed & approved web-enabled model for DC integrated justice 
information system;
    5. Established CJCC/ITAC internet site;
    6. Identified and completed five fast track projects;
``JUSTIS System'' Program
    Secured contractor support and developed and defined infrastructure 
vision for the Justice Integration System (JUSTIS). JUSTIS is an 
Internet-based ``middleware'' solution that allows local and federal 
justice agencies to share data without having to modify their existing 
legacy systems. Activities include(d):
    1. Developed JUSTIS Access standards & procedures;
    2. Secured technical oversight for the system;
    3. Development of privacy and security standards;
    4. Analyzed current practices over forty-five states RE: Tracking 
Numbers and implemented best practices;
    5. Criminal History Record Information System in development.
    Assisted in the development of the Youth Violence Initiative to 
reduce youth violence throughout the city while identifying and 
attacking the drivers that predispose our youth to failure and 
dangerous circumstances. This is a relatively new initiative still in 
development. The CJCC has been asked to play primarily a support 
function within this initiative. Activities include:
    1. Supported the Youth Violence Intervention Team;
    2. Numerous data collection activities and projects as directed 
including the collection of raw data on all violent crimes in DC;
    3. Support for the Mayor's Blue Ribbon Commission on Juvenile 
Justice by providing staff resources for best practices information, 
and current process baselining.
    Question. Mayor Williams, in your March 6, 2000 ``State of the 
District'' address, you stated that a major reason more officers are 
not patrolling the streets is: ``Because every day, more than 500 
police officers are stuck down at the courthouse, waiting for hours--
even days at a time--to testify in a hearing that may or may not be 
held.'' Is this an issue the criminal justice coordinating committee 
has addressed? With what outcome?
    Answer. The Criminal Justice Coordinating Council's ongoing (CJCC) 
``Caseflow Management'' project has as one of its primary goals to 
address persistent problems with police overtime and police time off 
the streets. This project has involved both data analysis designed to 
understand the factors driving the problem and uncover areas for 
targeted solutions and the development of concrete recommendations to 
reduce police overtime and time in court.
    Analyses conducted included the following:
  --Study of officer time spent in court. Analysis revealed that 90 
        percent of officer time is related to four proceedings: (1) 
        trial (48.6 percent); (2) papering (14.9 percent); (3) grand 
        jury (13.0 percent); and (4) witness conferences (12.3 
        percent); and
  --Study of current diversion programs that can reduce caseloads; and
  --Study of court statistics on time between milestone events (final 
        results to be completed in September 2000).
    System Improvements:
  --Developed new process flow for papering citation cases without 
        requiring an officer to appear for a papering interview;
  --Secured buy-in for a pilot program in MPD's Central Regional 
        Operation Center for a more efficient papering process; and
  --Currently assessing three technology options for automated 
        paperwork exchanges.
    Other potential arenas for improvement include:
  --Developed proposal for pilot community court in Ward 7 or 8;
  --Completed best practices study of differentiated case management 
        (DCM) systems across the country.
    Question. Mr. Mayor, several articles ran in the press last year 
criticizing the docket and scheduling management of the District 
Courts. The Congress provides funding for the District Courts. Do you 
have any recommendations for the Congress to urge on the courts?
    Answer. We will soon be in a position to make sound, data-guided 
recommendations regarding case scheduling in District of Columbia 
Superior Court. Superior Courts has been cooperative in working with 
the CJCC in providing access to data that will help improve the court's 
case management system. Recently, reports began to be produced 
providing both historical and current data on case management. We now 
have monthly reports that include: Caseloads by court calendar; 
Statistics on the time between every major case processing event; 
Average ``age'' of pending caseloads; and Rates of continuances, 
dismissals, and other dispositions.
    These reports will serve as invaluable management tools; careful 
analysis will enable us to identify process bottlenecks and areas for 
improvement.
    Question. In your budget, you state that the District spends $8.9 
million on overtime costs to pay Metropolitan Police (MPD) Officers to 
testify in court. You argue that the U.S. Attorney's Office requires 
officers to be present from 10:00 a.m. each day and to stay throughout 
the day until they testify. You state that MPD estimates that overtime 
would be cut in half if they were allowed to wear beepers and respond 
when alerted. Is this an issue the criminal justice coordinating 
committee has addressed? Is there something Congress could do to foster 
greater efficiency and cost effectiveness in MPD court testimony?
    Answer. Metropolitan Police Department (MPD) proposed the use of 
beepers as an innovative solution to the problem of police time in 
court. Since that idea was proposed MPD looked into the issue and found 
limitations to the solution. First, even if an off-duty officer were 
allowed to wear a beeper and therefore not be present at court until he 
or she was needed to testify, that individual would be entitled to 
receive overtime pay for the entire time he or she was on-call. Second, 
for officers who are on call, having to respond to beeper calls would 
present significant operational problems and potentially conflict with 
their enforcement duties. As stated in prior answers, MPD and the 
Administration are looking at other opportunities to reduce officer 
time in court.
    Question. When Chief Ramsey came to Washington two years ago, he 
found that over 75 percent of the telephones in the D.C. Police 
Department were rotary? What progress in facilities and equipment have 
you made over the last year and what does the District fiscal year 2001 
budget provide? Training has been a problem in the police department. I 
understand that recently only 200 of the 3,800 police were trained in 
sobriety testing. Has that improved? What does the proposed District 
budget provide for these training programs?
    Answer. When Chief Ramsey arrived in Washington, DC in 1998, he 
determined that over 75 percent of the MPDC telephones were rotary-
style. Presently, 100 percent of MPDC's telephones are touch-tone.
    The Impaired Driver Support Unit of the Forensic Sciences Division 
conducts field sobriety testing procedures. This testing has been 
offered in two stages: the initial Standard Field Sobriety Testing 
(SFST) training, which was conducted in Calendar Years 1999 and 2000 
for 74 members; and the second stage, the Breath Test for Alcohol 
Training (BTAT), which includes the use of the Intoxilizer breath-
testing equipment, that was conducted for 68 members during CY 1999 and 
2000. Since 1995, a total of 605 members have been trained, including 
317 members for SFST and 288 members for BTAT training. These figures 
are further delineated as follows (as of August 9, 2000):

----------------------------------------------------------------------------------------------------------------
                                                                   Number of     SFST        BTAT        Total
                           Calendar Year                            Classes    Trainees    Trainees    Trainees
----------------------------------------------------------------------------------------------------------------
1995............................................................           1          28          28          56
1996............................................................           8         104         105         209
1997............................................................           3          26          25          51
1998............................................................           4          85          62         147
1999............................................................           3          50          52         102
2000............................................................           1          24          16          40
----------------------------------------------------------------------------------------------------------------

    Question. Last year you reported that the criminal justice 
coordinating committee was targeting six drug markets in the city, 
starting last summer. Last year, Congress added $1 million in federal 
funds earmarked for this project. What are the results of this special, 
targeted effort?
    Answer. Metropolitan Police Department, not the Criminal Justice 
Coordinating Committee (CJCC), targeted six drug markets in the city as 
part of its Capitol Communities program. The results of this effort are 
summarized below:
  --In Districts Five and Seven, significant advances were made. A 
        partnership between MPD and the community resulted in the 
        transfer of an abandoned building used for drug activity to the 
        community. The building was rehabilitated and transformed into 
        a community center. This success story was presented at a 
        national forum at the Policing for Prevention (PFP) Conference 
        in San Diego.
  --In Districts One, Three, Four, and Six, the major strategy has been 
        focused law enforcement. This strategy has resulted in many 
        arrests, trash clean ups, towed abandoned cars, and boarded up 
        abandoned houses. Initially the Capital Community areas 
        included a two or three block area. Because of the success of 
        focused law enforcement, the drug problems have been displaced 
        or scattered. This displacement required an expansion of 
        focused law enforcement and the Capital Community areas and 
        surrounding blocks. The success of the Capital Community 
        initiatives resulted in many residents lobbying for their 
        communities to be next to receive exposure to the Partnerships 
        for Problem Solving (PPS) process.
    Question. Based on reports we have received, it appears that since 
July 1999, the number of slots available is up 21 percent. The number 
of people screened is up 48 percent since July 1999. The number of 
people on the waiting list down 15 percent since October 1999. There 
was also a 16 percent increase in the discharges of healthy patients. 
Those on waiting lists now only include methadone patients. What is the 
current waiting time for city-assisted indigent drug treatment in the 
District? How large is the backlog? What does your proposed budget do 
to attack this problem?
    Answer. The Addiction Prevention and Recovery Administration (APRA) 
has increased slots from 3,055 as of July 1999 to a current census 
capacity of 3,154 (as of 8/21/00). However, by the close of fiscal year 
2000, it is anticipated that APRA will increase capacity by an 
additional 956 (over the current 3,154 slots), thus increasing the 
total treatment capacity to 4,110 slots. This represents a cumulative 
increase of 1,055 slots between fiscal year 1999 and fiscal year 2000. 
This will constitute a 25.67 percent increase in slots between the two 
years.
    6,825 patients were screened by APRA in fiscal year 1999 (as of 
July 1999). Between August 1999 and August 2000, the numbers of screens 
have increased by 8,337 additional patients. Therefore, 1,512 more 
patients have been screened in fiscal year 2000 as of July 2000 than 
were screened in fiscal year 1999 as of July 1999. This represents an 
18.14 percent increase in screenings since July 1999.
    There were 481 patients on the waiting list in October 1999. There 
are 255 patients on the waiting list as of August 21, 2000. This 
represents a 46.9 percent decrease in the level of the waiting list 
that is only for methadone treatment. There are no other waiting lists.
    ``Healthy patients'' is not a criterion in the discharge data 
collected by APRA. The most comparable variable in the data collected 
is ``completed treatment'' and ``transfer''. There were 2,729 patients 
discharged in these categories in fiscal year 1999 and APRA projects 
that 3,111 will be discharged in these categories in fiscal year 2000 
(based on current trends). The increase in ``completed treatment'' and 
``transfer'' discharge categories in fiscal year 2000 over fiscal year 
1999 is anticipated to be 382 (12.28 percent) patients.
    It is correct that those on the waiting list now include methadone 
patients. There is a 6-month waiting time for comprehensive methadone 
treatment slots. There is no waiting time for other modalities. There 
are 255 persons waiting for methadone treatment. It is anticipated that 
this waiting list will be eliminated with the opening of a 410-slot 
methadone program scheduled for the end of August 2000.
    Question. Please outline and explain your goals and accomplishments 
for District drug treatment and prevention programs.
    Answer.
                               TREATMENT

------------------------------------------------------------------------
                                                  Fiscal year--
                                       ---------------------------------
             Service type                     1999        2000 Projected
                                        Accomplishments  accomplishments
------------------------------------------------------------------------
General Treatment Goals:
    Intake Screenings.................          8,189            9,736
    Inpatient Treatment...............            538              582
    Medical Detoxification............          2,370            3,204
    Outpatient/Methadone..............          1,417            1,910
    Outpatient/Non-Methadone..........          2,734            3,365
------------------------------------------------------------------------

Accomplishments for fiscal year 1999:
    Opened the 100-slot Umoja abstinence program.
    Implemented the Interim methadone maintenance program to expand 
methadone treatment capacity by 150 slots.
    Increased the medical detoxification unit capacity by 15 beds.
    Increased outpatient abstinence slots at the Adams Morgan 
Abstinence Center (AMAC) by 100 slots.
    Increased the New Risings Day Treatment program for women by 12 
slots.
    Increased outpatient abstinence capacity at the Shaw Abstinence 
Program (SAP) by 60 slots.
    Awarded a contract for 160 slots of outpatient treatment for 
Latinos to the Andromeda Transcultural Center.
    Increased slots for outpatient capacity for Latinos through sub-
grants with La Clinica Del Pueblo (25 slots), Latin American Youth 
Center (50 slots) and Whitman-Walker Clinic/Office of Latino Services 
(30 slots).
    Awarded a contract to RAP, Inc. for eighty-seven 120-day 
residential beds.
    Increased capacity in the Supervised Living Program for women and 
their children by 6 slots.
    Awarded a contract to Deep Run, Inc. for 24 youth residential beds.
    Developed and implemented, through an MOU with the DC Jail, a 120-
slot prerelease treatment readiness and discharge planning program.
Accomplishments for fiscal year 2000:
    In the process of transferring residential treatment services to a 
community-based system.
    Enhanced and expanded medical detoxification services.
    Improved the Central Intake Division to reduce waiting time for 
assessment and referral, improve the intake process.
    In the process of expanding community-based, residential treatment 
services through public/private partnerships.
    Implement a uniform contracts and grants monitoring system agency-
wide; and Other Drug (ATOD) first use.
    Expanded methadone treatment by 410 slots.
    Expanded dually diagnosed treatment by 150 slots.
    Implemented provisional application and review process for 
certifying all ATOD treatment providers.
    In the process of implementing a Hepatitis A, B and C prevalence 
study of the APRA patient population.
    A comprehensive implementable Drug Strategy for the District of 
Columbia is under development, the goal of which is to reduce the 
number of addicted persons by 25,000, and the annual addiction related 
cost to the city by $300,000,000.00 by 2005.

                               PREVENTION
Accomplishments for fiscal year 1999:
    APRA provided Outreach services to 128,251 District residents 
(73,060 Adults, 55,191 youth and 26,389 Latinos) and distributed 
513,000 pieces of literature.
    Completed and Distributed a Social Indicators of Substance Abuse in 
the District of Columbia.
    Awarded nine mini-grants to community-based, faith-based or grass 
roots organizations to provide summer cultural and educational 
prevention programs to more than 200 high-risk District of Columbia 
youth.
    Funded four one-year Science-based Prevention Demonstration 
projects, which will reach 100 youth.
    Receipt of the State Incentive Grant (SIG) from the Center from 
Substance Abuse Prevention (CSAP). The city will receive $6 million 
over a three-year period, 85 percent of which will be awarded to 
community-based organizations to implement science-based prevention 
efforts.
    Established a primary prevention program for 50 Latino youth.
    Provided Science-based prevention to the State Incentive Grant 
(SIG) Advisory Board; CBOs and general Public; Prevention and Treatment 
providers, and SIG Subgrant Applicants.
    Provided training to 102 DCPS Nurse on how to use curriculum 
(Learning to Live Drug Free--U.S. Department of Education). This is a 
curriculum model for prevention on general substance abuse prevention 
education, and will ensure substance abuse prevention education in all 
DCPS.
    Operated four alcohol, tobacco and other drug (ATOD) abuse 
prevention centers in key wards of the city (Wards 1, 2, 7 and 8).
    Provided Outreach Activities to include: (a) Support of the 
SafeNight Program; (b) Participation in health fairs around the city; 
and (c) Participation in the BET Teen Summit.
    Established a Mentoring and Tutoring program for District youth in 
Ward 8.
    Established an APRA Youth Advisory Council.
    Expanded Prevention programs in D.C. Public and Charter Schools.
    Expanded the in-school program from 30 to 40 schools to include 10 
Public Charter Schools.
    Conducted an alternative program for truants from DCPS.
    Established Drug Abuse Resistance Education (DARE) programs in 14 
DCPS.
    Established a Senior Citizens Substance Abuse Prevention 
Initiative.
    Conducted a Ministerial Institute.
    Conducted the 5th Annual Prevention Awareness Day.
    Conducted First Annual Youth Festival.
    PSAs were published in the Washington Post, City Paper, Latino 
News. PSAs aired on various AM Radio stations in both English and 
Spanish.
    Established and supported collaboration with several community-
based and private nonprofit agencies and organizations.
Accomplishments for fiscal year 2000
    Conduct tobacco compliance checks of 3300 District vendors.
    Conduct Household Survey on Substance Abuse.
    Institute an ATOD Prevention Public Awareness Campaign.
    Establish a District of Columbia Substance Abuse Prevention 
Epidemiology Work Group.
    Establish an Evaluation Grant for prevention programs.
    Establish a Community Volunteers Program.
    Develop a Substance Abuse and HIV/AIDS Prevention Curriculum with 
AHA and DCPS for DCPS teachers, students and parents.
    Establish a Faith-based ATOD Initiative.
    Conduct Alcohol Awareness Campaign in DCPS and DC Charter School.
    Conduct a Tobacco Prevention and Education Campaign in DCPS.
    Develop a media campaign to educate vendors on D.C. Law 8-262 which 
prohibits the sale of tobacco products to minors.
    Award twenty science-based prevention program grants (SIG).
    Award a Demonstration ATOD Youth Prevention Grant for mentally 
challenged.
    Award a Demonstration ATOD Youth Prevention Grant for Asian/Pacific 
Islanders.
    Award five $50,000 mini-grants on ATOD prevention.
    Conduct the Second Annual Youth Festival.
    Conduct a Citywide Drug Summit.
    Establish prevention programs in collaboration with the MPD.
    Conduct a citywide Drug Summit on Prevention Best Practices.
    Provide scholarships for youth to attend COG Prevention Program.
    Contract out prevention centers located in Wards 1, 2, 7, and 8.
    Establish a prevention center for Latino youth.
    Safe Passages Initiatives.
    Implement an alcohol, tobacco and other drugs (ATOD) community-
based prevention strategy aimed at reducing ATOD uses among District of 
Columbia youth by establishing four prevention centers.
    In collaboration with the Department of Consumer and Regulatory 
Affairs and other community partners will reduce the number of 
retailers who sell tobacco products to minors in the District of 
Columbia to 20 percent by September 30, 2000.
    Implement an ATOD Prevention program in 40 D.C. Public and Charter 
Schools to reach youth.
    DC Consortium on School Health/Education and Community Awareness 
Initiative.
    Provide 2 trainings and professional development sessions for 
school staff and families to enhance the ability to identify and 
intervene for children at risk for behavioral health issues.
    Strengthening Families Initiative.
    Building and Sustaining Healthy Neighborhoods Initiative.
    Question. Last year, Chairman Cropp, you and the Mayor mentioned 
nuisance properties as a major problem area for drug control efforts. 
What progress has been made over the last year? How many nuisance 
properties have you identified? How many have been demolished, sealed 
off, or otherwise cleaned up? How many have been condemned or 
foreclosed so they can be put to better public use or sold for a higher 
economic use?
    Answer. Significant progress has been made over the last year in 
addressing nuisance properties: As of August 17, 2000 196 properties 
have been condemned. 1,250 have been cleaned and barricaded, a 
significant increase over the previous year, 174 units have been 
demolished and an additional 200 units are in the pipeline to be 
demolished before December 2000. In addition, $248,000 in liens have 
been collected and have imposed fines of over $953,000.
    Question. Could you furnish a list of publicly- and privately-held 
nuisance properties and indicate any action taken?
    Answer. As you are aware, nuisance is the result of an activity or 
combination of activities. The abatement of the nuisance activity 
involves one or more agencies and often a combination of agencies e.g. 
Police and Public Works, DCRA and Fire Department, etc. We are in the 
process of installing a computerized database that will provide the 
capability to catalogue and cross-reference the nuisance properties. 
This effort is happening as we speak with some agencies having 
completed and populated databases and other agencies are still in the 
process of getting the system installed. The whole system is expected 
to be operational within six months.
    Question. Last year, Mr. Mayor, you reported last year that the 
city received bids from a number of firms to convert 300 units of 
abandoned housing because the real estate market is strong. One year 
later, on how may of those 300 units has construction been started or 
completed? How long does this process take? Are there ways you can 
speed up making these units available for homeownership?
    Answer. Through the Department of Housing and Community Development 
Homestead program, 47 units have been completed, 127 units are under 
construction, 161 units have been transferred with construction 
expected to begin within 45 days, and 167 additional units will be sold 
by Sept. 30, 2000.
    Question. Mayor Williams, the consensus budget provides $21.3 
million to convert over 1,000 units. You originally had $22.0 million. 
Why was the $700 thousand cut? Where did it go?
    Answer. The modest reduction in funding was the result of budget 
negotiations in which additional funds were allocated to specific 
projects and there was a small overall decrease in total capital 
expenditures done in the name of fiscal conservatism.
    Question. What progress has been made on straightening out the mess 
with management of halfway houses? For correctional halfway houses and 
group homes for the mentally retarded, what progress have you made in 
the last year to get rid of under performing contractors? How many 
contractors have been decertified? How have you assured that their 
replacements are going to meet performance standards?
    Answer.
DHS/MRDDA
    The Department of Human Services/Mental Retardation and 
Developmental Disabilities Administration (MRDDA) has not initiated any 
actions to terminate any contracts within the last year. MRDDA has been 
more aggressively monitoring providers of services and has recently 
developed a plan of correction involving five group homes being 
operated by one provider. Also, MRDDA has conducted several competency-
based trainings for providers of services to improve the delivery of 
the service and is continuing to schedule ongoing training.
    The District of Columbia has also passed the Procurement Practices 
Human Care Agreement Amendment Act of 2000. This law amends the 
District of Columbia Procurement Practices Act of 1985 and allows for 
the District to obtain assurances during a pre-qualification process 
that the vendor is qualified to deliver the service and is a 
responsible bidder for the particular service.
Child and Family Services Agency
    In the Child and Family Services Agency, the agency currently 
utilizes only 2 providers for housing MR/DD children. The providers are 
Ward and Ward Mental Health Services, operated by Dr. Ruth Ward, and 
Community Multi-Systems, operated by Constance Reese. Ward and Ward 
houses 12 children in 3 home-like settings with 4 children each.
    These children are not ambulatory. There is another facility to 
hour 4 ambulatory school-age children. Additionally, they have 
apartments for 2 old MR/DD teens up to age 21, and 1 MR/DD teen mother.
    CMS has four facilities, three of which house four adolescents 
each. One of the four homes serves six females. Their program monitor, 
Ms. Carolyn Gregory, monitors these programs at least monthly. Each 
facility is visited monthly and unscheduled spot checks are frequent. 
If there are particularly unusual incidents occurring or community 
complaints, Ms. Gregory goes out more often. Unscheduled fire drills 
are conducted monthly to ensure the safety of the residents. Physical 
plant deficiencies are promptly documented and the facilities are given 
deadlines to complete repairs. These providers have the lowest 
incidence of physical plant deficiencies, among all of the agency's 
providers.
    Both CMS and Ward and Ward have excellent reputations for running 
clean facilities. Staff conducts bed checks on the non-ambulatory 
children to ensure that they are dry, that the beds are dry, and that 
there are no signs of diaper rash or bed sores. Staff also checks 
medications to ensure that they are being administered correctly and 
that the records are accurate and match physician orders. Record 
reviews are also done to ensure that any special needs the children 
have are met.
    CFSA's primary concern is with the insufficient number of MR/DD 
homes to meet the growing need, especially for higher functioning 
clients who still function at levels too low to comfortably fit into a 
traditional group home with children of normal intelligence.
Youth Services Administration
    YSA's Contract Monitoring /Quality Assurance Unit.--YSA's Contract 
Monitoring/Quality Assurance Unit is responsible for monitoring all 
contractual and YSA operated group/shelter home facilities, which 
currently numbers sixteen. This Unit's staff was recently expanded from 
two to four, in February 2000.
    Inspection Practices.--YSA's Contract Monitoring/Quality Assurance 
Unit conducts announced quarterly inspections of all YSA contracted 
group/shelter homes. These quarterly inspections began in 1997. Each 
announced quarterly inspections entails a health and safety review, and 
a review of each group/shelter home's program components.
    Health and Safety each quarter.--YSA monitoring each group/shelter 
home facility to ensure it meets all fire, health and safety 
requirements, per the American Public Health Association Standards, 
Building Occupancy Codes, District of Columbia Manual of Regulations, 
National Fire Prevention Association codes, OSHS Standards, and ACA 
Standards.
    In addition to announced inspections, at least one unannounced 
inspection is conducted for each group/shelter home each quarter. 
Unannounced inspection may be limited in focus to as one area of 
operation, or up to and including all program components, and/or 
facility area (fire, health, and safety). Unannounced inspections may 
occur at any hour.
    Inspection Findings.--Facilities that fail to meet all Health and 
Safety and Program Component requirements are classified as Greenline, 
Yellowlines or Redline. The YSA Contract Monitoring/Quality Assurance 
Unit provides the respective facility with a written notification of 
its deficiencies and the resulting classification. The facility is 
required to submit a Corrective Action Plan within a specified 
timeframe.
    Greenline requires immediate attention, and continued monitoring 
every thirty days. A Corrective Action Plan is required in writing 
within 72 hours of classification notice.
    Yellowline requires monitoring very 90 days. A Corrective Action 
Plan is required in within 14 days of classification notice.
    Redline requires monitoring very 90 days. A Corrective Action Plan 
is required in writing within 30 days of classification notice.
    Failure to comply with the policies and provision outlined for each 
classification may, upon review, result in an elevation of that status. 
Failure to comply with the Greenline status policies and provision may 
result in the termination of the contract.
    Re-Inspections.--A re-inspection is scheduled at the completion of 
an announced quarterly inspection, and upon receipt of a Corrective 
Action Plan, or for a facility that has received classification. A re-
inspection is generally unannounced, but may be a schedule event. The 
focus of the re-inspection is correction of deficient areas. Once the 
deficient areas are corrected the facility continues to be monitored on 
a monthly basic until quarterly inspection.
    Meetings.--YSA's Contract Monitoring/Quality Assurance Unit 
conducts monthly meeting with the Group/Shelter Home Administrators. 
Relevant issues are discussed, including unusual incidents, changes in 
YSA policies and procedures, upcoming inspections and training and 
technical assistance.
    YSA's Administrator and Deputy Administrator meet on a quarterly 
basis with the owners of the group/shelter homes. Relevant issues, such 
as changes in YSA policies and procedures, are discussed.
    Training and Technical Assistance.--YSA's Contract Monitoring/
Quality Assurance Unit provides training and technical assistance to 
call contracted group/shelter home staff. Multiple are scheduled to 
allow all group/shelter home staff to attend while ensuring adequate 
coverage at each facility. Training covers a variety of issues, 
including health and safety issues, YSA policies, and adolescent 
development and parenting issues.
    Problem Facilities Closed.--On April 16, 1999 Lamont Shelter, by 
the Bureau of Rehabilitation, was due to structural deficiencies. After 
receiving a ``Notice to Cure Performance Deficiencies . . .'' the 
Bureau of Rehabilitation corrected the stated deficiencies. YSA and the 
office of the Fire Marshall conducted new inspection and YSA agreed to 
release the Bureau of Rehabilitation from the Notice of Cure on May 26, 
1999. The facility was reopened.
    Question. Do you believe this plan (budget document submitted to 
Congress) addresses the concerns raised by GAO and will enable you to 
comply with the law (two levels of performance, titles of officials)?
    Answer. The fiscal year 2001 Proposed Operating Budget and 
Financial Plan represents an important advance in implementing a 
performance management system that will hold agency directors 
accountable, drive lasting change in District agencies and provide the 
level of service and quality of life that District residents demand and 
deserve. Each budget chapter of agencies that are under the authority 
of the Mayor includes performance goals and measures drawn from agency 
directors' performance contracts. Senior managers accountable for 
achieving each objective are identified by title as required by the 
Federal Payment Reauthorization Act of 1994 (Public Law 103-373).
    However, the performance goals do not include two levels of 
performance. As noted in our response to the GAO report, the District 
advocates eliminating the requirement for two levels of performance for 
each goal or objective. I outlined the District's position on this 
issue in a June 26 letter to Senators Voinovich, Durbin and Hutchison 
and Representatives Istook, Davis, Moran and Holmes-Norton and my staff 
have prepared a proposed amendment to effect this change.
    In directing agencies to set performance measures, I emphasized 
establishing ambitious yet attainable targets. If the existing agency 
performance targets are labeled superior performance, we invite 
agencies to pull back from their ambitious targets and to only seek to 
achieve acceptable performance levels; performance less than the 
commitments the agencies and I have made to the District's residents.
    Furthermore, the requirement is inconsistent with performance 
reporting requirements for Federal agencies established under the 
Results Act. Finally, in researching the origins of the provision, U.S. 
Senate staff discovered that the requirement is an artifact of a 
proposed personnel law that required two levels of performance for 
senior managers in District government. The personnel proposals were 
never enacted but the requirement remained for agency level reporting. 
For all of these reasons, I advocate eliminating the requirement for 
two levels of performance.
    Question. Is the current statutory deadline problematic? How would 
a legislative change to reconcile the submission date requirement help 
facilitate your intent to treat the annual budget as the plan required 
under Public Law 103-373?
    Answer. Any plan of performance commitments is only meaningful when 
linked to the budget process. While performance management and 
budgeting have not been linked in the past, the Williams Administration 
began to link them with the preparation of the fiscal year 2000 budget 
in January 1999. Modifying the submission timeframes will help 
strengthen this linkage in future budget and performance plan 
submissions.
    The congressional performance plan submission date of March 1 only 
precedes the March 15 deadline for submission of the Mayor's budget to 
the Council of the District of Columbia by two weeks. We would like to 
request that an initial District performance plan be due to Congress 
concurrent with the budget submission to Council and a final District 
performance plan be due to Congress with the submission of the 
District's Proposed Operating Budget and Financial Plan no later than 
June 15. This is consistent with the requirement for Federal agencies 
to submit an initial performance plan with their budget request and a 
revised performance plan subsequent to the transmittal of the 
President's budget to Congress.
    Question. Are you satisfied with this report as a first effort? 
Will this report form an adequate basis for comparison in future years? 
Are you fully committed to this process? Have you been working with the 
General Accounting Office to improve this report in future years? Does 
this match your concepts of performance management?
    Answer. The District's first annual performance report is a 
significant step forward in establishing the District's performance 
management system, but we have substantial work remaining. GAO's 
assessment was limited to the extent to which the District of Columbia 
1999 Yearend Management Report addressed objectives established by the 
District of Columbia Financial Responsibility and Management Assistance 
Authority (``the Authority''). Many of the areas of ``non-compliance'' 
GAO noted were driven by what the Authority's fiscal year 1999 
performance plan contained and lacked: objectives not adopted by the 
Williams' administration, single levels of performance targets, no 
reference to District government activities subject to court orders.
    The District of Columbia 1999 Year-end Management Report addresses 
the performance objectives set by the Williams Administration in its 
first year and agencies' success in meeting those objectives. In 
setting the objectives for the District, I asked agency directors with 
developing both short-term action agendas and long-term strategic 
plans. While many directors drew on initiatives within their agency's 
section of the Authority's Plan, they were free to develop wholly new 
strategic plans and most did. Moreover, our emphasis was on identifying 
and reporting against fewer, more meaningful performance measures that 
truly reflected our strategic direction, rather than dozens and dozens 
of performance measures established in a prior administration, many of 
which did little to gauge how well our government was performing.
    Future year-end reports will present results by the Williams 
administration against plans and objectives established by the Williams 
administration, allowing for long-term comparisons of results to 
indicate progress on our initiatives. In addition, we have incorporated 
several of the GAO's recommendations in the fiscal year 2001 
Performance Plan and the working outline for the fiscal year 2000 
Performance Report due to Congress in March 2001. As noted above, the 
fiscal year 2001 Operating Budget and Financial Plan already 
incorporates the titles of the senior managers accountable for 
individual objectives in agency strategic plans, and future year-end 
reports will continue to include that information. GAO also worked with 
attorneys in the District's Office of the Corporation Counsel to 
identify 12 major civil actions concerning the activities of the 
District government during fiscal year 1999 that fulfill the 
requirement to report on the status of civil actions. The District will 
report on the status of those lawsuits and court orders in the fiscal 
year 2000 Performance Report and future year-end reports. Finally, we 
will enhance our reporting format by displaying both historical 
performance data and targets for those objectives that continue over 
several years. The presentation of major objectives, the identification 
of the senior managers accountable for achieving those objectives and 
the display of performance data over time are all in line with my 
approach to performance management.
  --Define the goals and inform the public what they are;
  --Give agency leadership the resources and support needed to meet the 
        goals;
  --Establish a system to hold them accountable at the end of the day.
    Question. Last year, you mentioned your weekly meeting with your 
agencies--you called it your ``supply line meeting''. What are some 
examples of the ``barriers'' you mentioned that your ``supply line 
meeting'' participants have identified and removed over the last year?
    Answer. Among the supply line issues that agency directors and 
senior managers have identified as the highest priorities to address 
are personnel reforms and the District's entire acquisition process. We 
have made great progress in implementing long-standing personnel 
reforms including the performance management systems for agency 
directors, the launch of the Management Supervisory Service and the 
institution of a performance management program for managers, 
supervisors and excepted service personnel. During fiscal year 2001, we 
will begin to expand the use of the performance management program 
beyond senior and middle management and will include its implementation 
with unionized personnel among the issues to be discussed in ongoing 
collective bargaining negotiations.
    Procurement is still a major problem, but we are making advances. 
We have begun to implement a purchase card to handle micro-purchases in 
the District government, and we expect virtually all of the major 
District agencies to be using the purchase cards by October 1, 2000. 
This should take much of the small purchase volume out of the system 
and allow procurement staff to focus on larger acquisitions. Moreover, 
the District recently engaged a procurement expert from the Internal 
Revenue Service to review the entire acquisition process, and his 
report offered both short-term solutions that we can use to jump start 
the process and long-term strategies. We recognize that serious 
problems remain in procurement, but we are committed to acting sooner, 
rather than later.
    Question. You also mentioned giving incentives to managers. What 
progress have you made in this area over the last year?
    Answer. As we focus on holding managers accountable for their 
performance, our strategy is to recognize and reward excellent 
performance, while taking appropriate action in other instances where 
managers are not able to do their jobs. Incentives for agency directors 
will be tied to their performance against the commitments outlined in 
their agency strategic plan and their performance contract with the 
Mayor. My deputy mayors and I have completed mid-year evaluations of 
each agency director with a performance contract to assess how each 
director is meeting his or her performance objectives. Directors were 
to identify new priorities that have arisen during the year and to 
establish action plans to ensure that initiatives that are off-track 
are completed by year-end. At year-end, we will evaluate directors on 
how well they met their objectives and will reward exceptional 
performance and will address poor performance accordingly.
    The Management Supervisory Service (MSS), authorized by Council in 
1998, also provides performance incentives to senior and middle 
managers. Letters inviting approximately 1,100 non-unionized managers 
and supervisors to become members of this new at-will, merit-based 
senior service went out the second week in August. The Office of 
Personnel will have official figures on MSS enrollment available by 
September, but preliminary data indicates nearly 90 percent of managers 
and supervisors invited to enroll in MSS have done so.
    Question. You touted the supply line meeting as the forum in which 
you could assure that the District would not lose available federal 
grant monies. Has the supply line meeting improved the Districts 
grantsmanship over the last year?
    Answer. The Office of Grants Management and Development and the 
Office of Budget and Planning have developed a reporting system for 
agencies to track each Federal Grant award, the appropriated amount in 
the current fiscal year, expenditures and obligations to-date, and any 
potential lapses during the current year. Agency reports through July 
2000 have just been received and OBP and OGMD staff are analyzing the 
data. Agencies with potential lapses are to provide revised spending 
plans through the end of the fiscal year illustrating what portion of 
available funds they will and will not be able to spend.
    Question. Your budget includes $13 million for a ``Management 
Supervisory Service''. How is this $13 million going to be used? Will 
it be used for bonuses under a pay for performance or gainsharing 
program?
    Answer. The $13 million budgeted to implement the Management 
Supervisor Service will not be used for bonus pay or as part of a 
gainsharing program.
    The MSS program is designed to create a new cadre of managers that 
ultimately increases accountability in the government workforce. The 
$13 million will be used to offer salary increases to approximately 
1,100 supervisory and management employees. In exchange for accepting 
the salary increase of approximately 10 percent, managers and 
supervisors who join the MSS program will forfeit their civil service 
protections and serve at the pleasure of the mayor.
    Question. Please give an update on your Partnerships for Problem 
Solving (PPS) Initiative pilot program which you expanded from 6 to 14 
of the 83 Police Service Areas (PSAs) in the city. What are some of the 
specific problems targeted by some of these pilot PSAs and some of the 
accomplishments over the last year? What is your assessment of the PPS 
Initiative?
    Answer. Partnerships for Problem Solving (PPS) is MPD's initiative 
to train police, community volunteers and other agency representatives 
citywide to advance neighborhood partnerships that address local crime 
and disorder problems. The program employs a five-step problem-solving 
model, which ensures that democratic and inclusive strategies and 
tactics are planned and carried out by participating partners.
  --Currently 34 PSAs, including Capital Community PSAs (described in 
        7A) are engaged in the PPS process.
  --An estimated 1,825 community volunteers and other agency 
        representatives have received PPS training on various topics.
    In PSA 110 accomplishments include the following: law enforcement 
partners canvassed neighborhoods door-to-door to ascertain public 
housing residents' needs; neighborhood watch signs have been erected; 
security patrols are more frequent and visible; community clean-ups 
have taken place; and a panel of high-ranking public officials convened 
to address legislation that will impact drug activity in the area.
    In PSA 301 accomplishments include the following: establishment of 
a strong partnership among the community, police, and City Councilman 
Jim Graham; Drug Free Zone signs were erected; new trash containers 
were placed in the area; and pedestrian crosswalks were newly painted.
    In PSA 206 accomplishments include the following: increased 
inspection of bars to ensure compliance with all D.C. codes; additional 
rodent abatement measures; improved parking enforcement; and 
development of a consortium of D.C. universities that are working on 
the issue of underage drinking and its impact on students.
    Question. Policing for Prevention is a related community policing 
initiative we have heard about from the MPD, including a program to 
enter a partnership with the Court Services and Offender Supervision 
Agency to improve case management of people in the community on 
probation and to prevent recidivism. What is your assessment of 
Policing for Prevention?
    Answer. The Administration is excited and optimistic about the 
potential of Policing for Prevention Program, which includes MPD 
partnerships with Court Services and Offender Supervision Agency 
(CSOSA) designed to reduce crime among repeat offenders, thereby 
increasing public safety. A total of 12 PSA teams have received 
training during the pilot period; an additional 18 PSAs will enter 
partnerships this fall. Key elements of the partnerships include the 
following:
  --Law enforcement is enhanced by information sharing at regular 
        meetings and joint police/parole officer visits to high-risk 
        offenders;
  --Needed resources, such as drug testing, including employment 
        services and life skills training, are targeted and directed to 
        high-risk offenders; and
  --Neighborhood partnerships and problem-solving efforts are bolstered 
        by collaborative outreach efforts to residents, other city 
        agencies, or community stakeholders to develop networks to 
        solve crime and disorder problem's.
    Question. Some health care advocates said they were disappointed 
the council and mayor did not boost spending on health programs for 
low-income residents. Mayor Williams, Chairman Cropp, what is your 
reaction to this concern?
    Answer. Expanding and enhancing the city's network of community-
based health care providers. These ``medical homes'' will emphasize 
primary care services but will also include access to the diagnostic, 
specialty care and inpatient services our residents need to return to 
good health, should they become ill. These facilities will serve both 
insured and uninsured individuals in environments that are welcoming to 
individuals of varied cultural and ethnic backgrounds.
    Extending Medicaid coverage to adults without dependent children 
with incomes up to 50 percent of the federal poverty level. This is 
part of a phased plan which will ultimately extend Medicaid to District 
residents up to 200 percent of poverty.
    Extending health insurance coverage for uninsured immigrant 
children who do not qualify for Medicaid and providing free or 
discounted prescriptions to individuals without drug coverage benefits 
who can not afford to purchase necessary medicines.
    Providing senior wellness services to aid older adults, especially 
low income individuals, to lead healthy and independent lives.
    Most importantly, nearly a third of the funds under the Mayor's 
plan would support tobacco control and health promotion efforts. The 
programs envisioned under these efforts will focus on youth, the poor 
and ethnic communities who comprise a large portion of the city's 
tobacco users.
    These efforts, together with other health initiatives being 
implemented in the District, form the basis of the Mayor's health care 
reform plans and will result in major improvements in the health status 
of our residents.
                                 ______
                                 

  Questions Submitted to the Financial Responsibility and Management 
                          Assistance Authority

          Questions Submitted by Senator Kay Bailey Hutchison

    Question. Please provide the Subcommittee with a copy of the 
criteria established by the Chief Financial Officer and approved by the 
Mayor, District Council and Control Board pursuant to Section 148 of 
Public Law 106-113, the District of Columbia Appropriations Act for 
Fiscal Year 2000.
    Answer. The Chief Financial Officer adhered to the criteria 
established in Section 148, paragraphs (B) and (C), of Public Law 106-
113, and established no additional criteria pursuant to this Section of 
the Act. In July 1999, before Public Law 106-113 was enacted, the 
District Council, the Mayor, and the Financial Authority approved the 
Fiscal Year 2000 Budget Support Act (D.C. Act 13-111) which contained 
criteria for using the Reserve Fund. On September 29, 1999, the Chief 
Financial Officer (``CFO'') distributed a memorandum (attached) to all 
agency chief financial officers that listed the Budget Support Act 
criteria. Again referring to those criteria, on January 24, 2000, the 
CFO distributed instructions to agency directors and agency CFOs along 
with a template for requesting reserve funds. (attached). On February 
14, 2000, the CFO reported to the Mayor on those requests (attached).
    Question. In response to recent reports that the District has 
failed to claim $40,000,000 to $80,000,000 in Medicaid reimbursements 
over the past four years, please answer the following questions:
    Answer. If the District were collecting the Medicaid reimbursements 
to which it is entitled, how much would that reduce the District 
taxpayers' responsibility for special education costs?
    What is the District doing to remedy this serious mismanagement 
problem?
    Answer. Reported estimates that, $80 million in additional Medicaid 
reimbursements is potentially available to the District of Columbia 
Public Schools (``DCPS'') for medically necessary special education 
costs are based upon overly optimistic assumptions. In fiscal year 
1999, DCPS collected $4.6 million in Medicaid reimbursements for 
medical services provided to special education students. The fiscal 
year 2001 budget for the public schools assumes additional Medicaid 
reimbursements of $12 million. The highest gross estimate of the health 
services that are potentially reimbursable by the District Medicaid 
Program ranges up to $40 million.
    This upper limit estimate is based upon unverified assumptions. The 
amount assumes that 65 percent of the special education private tuition 
and related transportation costs are covered services under the 
Medicaid Program. These and similar estimates assume that eligible 
collateral therapies are provided three days a week with the result 
that transportation costs are recoverable for 60 percent of the time. 
These estimates also reflect optimistic assumptions with respect to 
student attendance,
    A District interagency task force (District Medical Assistance 
Administration (Medicaid), DCPS and the City Administrator) is working 
to improve the DCPS capacity to obtain appropriate reimbursement from 
the Medicaid program for covered services with the aim of achieving the 
fiscal year 2001 budget goals. The objective is to maximize the 
Medicaid reimbursement given current rates and current information.
    A longer-term objective to maximize Medicaid reimbursements 
requires the periodic cost analysis required to revise payment rates 
that must be approved by the federal Department of Health and Human 
Services (``DHHS''). Future claims will be based on those rates. Under 
appropriate circumstances, claims already submitted based on obsolete 
rates will be recycled via the standard cost settlement process. At 
present transportation costs are reported at the route level. The need 
to maximize student level reporting will ensure that all claims 
submitted to Medicaid are valid. Similarly, non-public treatment 
providers must provide/maintain adequate claims or claims history 
information in order to substantiate a reimbursable claim submitted to 
the Medicaid Program,
    The current rate for transporting special education students is $13 
per trip, but the actual cost is approximately $50-$60 per trip. 
Setting rates for residential and nonresidential treatment for the 
students is especially complex because vendors provide a wide range of 
services. The services and costs must be classified so that the average 
rates for a class of services adequately compensate providers for 
services rendered as set by federal guidelines.

                         CONCLUSION OF HEARING

    Senator Hutchison. Did you have anything further?
    With that then, unless you had any further comments, the 
meeting will be recessed.
    Mayor Williams. Thank you, Senator.
    Ms. Cropp. Thank you very much.
    Dr. Rivlin. Thank you.
    [Whereupon, at 12:32 p.m., Tuesday, June 13, the hearing 
was concluded, the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


        DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 2001

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                        NONDEPARTMENTAL WITNESS

    [Clerk's note.--At the direction of the subcommittee 
chairman, the following statement received by the subcommittee 
is made part of the hearing record on the Fiscal Year 2001 
District of Columbia Appropriations Act.]

                   Prepared Statement of Paul Strauss

    Chairman Hutchison, Senator Kyl, and Senator Durbin: Thank you for 
the opportunity to submit testimony for the record. I am Paul Strauss, 
Shadow Senator for the District of Columbia, and I would like to set 
out my reasons for fully supporting the proposed fiscal year 2001 
budget submitted jointly by Mayor Williams, the District of Columbia 
Council, and the Financial Control Board.
    Before I begin, though, I would like to describe briefly for the 
record exactly what a ``Shadow Senator'' is. The position of Shadow 
United States Senator is not unique to the District of Columbia. From 
the earliest days of our existence as a country, areas desiring 
statehood elected Shadow Senators--12 in all--prior to their admission 
as States. All but one of the twelve were eventually seated as full 
Senators when statehood was achieved. My role as the District's elected 
U.S. Senator is to be an advocate on issues of importance to the 
citizens of the District of Columbia that are before the Senate. It is 
in that role that I provide testimony in support of the District's 
proposed budget.
    Let me point out some aspects of this budget that are of special 
interest to my constituents. First, the proposed budget includes 
funding initiatives to begin implementing the City-Wide Strategic Plan 
for unity of purpose and democracy. That Plan includes strong pursuit 
of voting rights for citizens of the District, to ensure that our needs 
are represented and served as well as those of all other Americans. The 
Plan incorporates citizens' desires about neighborhood action planning. 
It provides improved access to public information about government 
programs and services. Finally, the Plan will improve the capacity of 
Advisory Neighborhood Commissions to represent citizen interests.
    This proposed budget also includes investment in government 
management tools and technology that will enhance oversight ability and 
bring more badly-needed accountability to many programs. For example, 
there is a proposed increase in funding for the Office of Inspector 
General, which will allow substantially expanded audit and evaluation 
activities. And there is proposed new investment in the City 
Administrator's office to enhance the Office's ability to direct and 
coordinate agency activities.
    In addition, the proposed budget includes increased funding for key 
human services programs, such as mental retardation and developmental 
disabilities services, addiction prevention and recovery services, and 
HIV/AIDS programs.
    There are significant proposed increases in program budgets that 
address crime victims' rights, law enforcement needs, violence against 
women. Local funding will be used to establish new risk management 
programs.
    Higher education also sees an increase in this proposed budget, 
with funding for the University of the District of Columbia to expand 
speech-language pathology and teacher education programs, adult 
education, and the Saturday Academy. The last program cited is designed 
to increase the number of minority students enrolling in college in 
science, math, engineering, and other technical fields.
    Good public libraries are a key resource for well-educated 
citizens. They are essential in communities where people are gaining 
knowledge and skills for new jobs but where citizens do not have the 
resources to invest in books, computers and other materials 
individually. This proposed budget expands funding for District 
libraries, so that computer literacy programs can continue and 
traditional literacy programs can be expanded. The libraries will also 
stay open during more accessible periods.
    There are many other examples I can cite of proposed budget 
increases that will benefit District citizens. But there is another 
more important point to be made, too.
    The budget before you is the product of cooperation between the 
Mayor's office, the City Council, and the Financial Control Board. It 
is another step forward in the District's progress toward a budget set 
and administered solely by government officials elected by District 
citizens. This budget has been agreed upon by every organization 
participating in this process. It is a product of difficult decisions 
and equitable compromises--a budget that balances economic development, 
progress toward tax parity with other jurisdictions, and providing 
much-needed social services. With this in mind, I urge the Congress not 
to make any significant changes or impose any controversial riders to 
this proposed budget. It is the budget proposed by the city, for the 
city. As it is, this budget provides the city with adequate funds for 
education, health care, public works, and all the fundamentals of urban 
life that are so essential to my constituents. With that in mind, I 
hope that this committee approves this budget as it stands, with the 
intention of doing everything in its power to shepherd this bill 
through the Congress intact.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Cropp, Linda W., Chairman, Council of the District of Columbia, 
  District of Columbia...........................................     1
    Prepared statement...........................................    16
    Statement of.................................................    12

Durbin, Hon. Richard J., U.S. Senator from Illinois, questions 
  submitted by...................................................    70

Hutchison, Hon. Kay Bailey, U.S. Senator from Texas:
    Opening statement of.........................................     1
    Questions submitted by.......................................54, 84

Kyl, Hon. Jon, U.S. Senator from Arizona, question submitted by..    53

Rivlin, Dr. Alice, Member, Financial Responsibility and 
  Management Assistance Authority, District of Columbia..........     1
    Prepared statement...........................................    20
    Statement of.................................................    18

Strauss, Paul....................................................    87
Subcommittee on the Adoption Incentives Plan, letter from........    27

Williams, Hon. Anthony A., Mayor, Office of the Mayor, District 
  of Colum- 
  bia............................................................     1
    Prepared statement...........................................     9
    Statement of.................................................     3


                             SUBJECT INDEX

                              ----------                              

                          DISTRICT OF COLUMBIA

                  Council of the District of Columbia

                                                                   Page
Additional committee questions...................................    53
Births...........................................................    41
Budget:
    Agreement with the Mayor.....................................    16
    Fiscal year 2001.............................................    13
        Council's review of......................................    16
    Request, Council reports on..................................    13
CFO, certification by............................................    15
D.C. general.....................................................    36
Debt:
    Issue........................................................    36
    Per capita...................................................     2
    Policy.......................................................     2
District compared to other cities................................    40
Education spending...............................................     2
Exodus from city slowing.........................................    15
Federal funds, percent of........................................     1
Loans, repayment on..............................................    53
Management reform savings, $37 million...........................    14
Marijuana possession law.........................................    43
Operational improvement savings..................................    15
PBC:
    Consult for oversight of.....................................    36
    Financial status of..........................................    36
    Loans to.....................................................    36
Prenatal care....................................................    42
Public works, more funding for...................................    15
Reserve..........................................................     2
    Carryover, the freed-up appropriated funds from the..........    17
    Funds........................................................     2
    $150 million.................................................    14
    Tiers of spending............................................    14
Schools, full funding for........................................    15
Tax:
    Cut..........................................................     2
    Rate.........................................................    41
    Revenues going up............................................    43
Unanticipated needs..............................................     3

      Financial Responsibility and Management Assistance Authority

Accomplishing, six items need....................................    19
Additional committee questions...................................    84
Adoptions........................................................    27
Charter schools..................................................    25
Contingency expenditures.........................................    52
Control:
    Board........................................................    53
    Period, end of...............................................    18
Economic development.............................................    20
Financial management policies....................................    23
Interest bearing fund............................................    52
Public Benefit Corporation.......................................    20
Reserve fund.....................................................    51
    Expenditures of..............................................    52
School problems--special education, truancy, working relationship 
  with charter schools...........................................    20
School system reform.............................................    19
Tobacco funds....................................................    24
University of the District.......................................    20

                          Office of the Mayor

Additional committee questions...................................    54
Adoptions, $5 million for........................................    26
Appropriation bill, riders on....................................     9
Basic obligations, meeting.......................................    39
Brianna Blackmond................................................    26
Budgets, four consecutive........................................     4
Charter schools..................................................     5
City, strategic plan for.........................................    40
Commercial revitalization program................................    45
Debt policy......................................................    24
Democracy........................................................    12
DMV, improvements at.............................................     8
Economic development.............................................     7
Education........................................................     9
Fire department..................................................     7
Government:
    Efficiency...................................................    11
    Right size...................................................     7
Gun buyback program..............................................     7
Health care...................................................... 8, 11
Management supervisory service...................................     8
Neighborhood:
    Action.......................................................     4
    Development..................................................    11
Pell Grant Program...............................................     6
Public works, equipment for......................................     8
Risk management..................................................     8
Safe neighborhoods............................................... 6, 11
School funding...................................................     4
Tax cut..........................................................    38
Technology improvements..........................................     8
Tuition assistance............................................... 5, 10
Youth:
    Initiatives..................................................    10
    Violence.....................................................     5

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