D.C. Gov't Ready To Re-Take Control

Tuesday, January 30th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) â€” Less than six years after the city government was on the verge of financial collapse, officials in the nation's capital have achieved a nearly billion-dollar turnaround and are ready to retake control from a federal board.

``We have moved from financial crisis to financial stability,'' Mayor Anthony A. Williams said Monday.

Williams and other city officials marked the release of a fourth consecutive clean audit reflecting a balanced budget with an operating surplus of $240.7 million for fiscal year 2000. They heralded the city's independence from a presidentially appointed financial control board.

``The general fund balance at the close of the year stood at about $465 million. This compares to a negative fund balance of $518 million at the end of fiscal year 1996,'' said Natwar M. Gandhi, the city's chief financial officer.

Mounting financial problems and widespread indications of mismanagement surfaced after Mayor Marion S. Barry Jr. was returned to office following a 1994 drug conviction.

Four months after Barry's fourth-term inauguration in January 1995, congressional leaders and the Clinton White House created a ``financial control board'' to run a large part of the government.

``The city was not only insolvent, but was in fact bankrupt,'' said Andrew Brimmer, a former member of the Federal Reserve Board who was selected by President Clinton as the first chairman of the control board.

The four appointees used congressional statutes to strip Barry of much of his authority and cut city spending by laying off thousands of workers.

Brimmer praised the results of enforced belt-tightening, aggressive revenue collection and massive modernization of city services.

``From the low point to the high point, that is a climb of a billion dollars out of the hole,'' said Brimmer pointing to graph illustrating the turnaround.

``We will continue to be here to help,'' said Alice M. Rivlin, another Federal Reserve alumnus who succeeded Brimmer as head of the board in 1998.

Although the statute creating the control board does not expire until the close of fiscal year 2003, Rivlin said the city's financial performance will allow the board to go into dormancy when the current fiscal year ends Sept. 30.

The control board returned day-to-day authority over much of the city government to Williams, the city's former chief financial officer when he succeeded Barry on Jan. 2, 1999.

A school board consisting of four appointed and five elected members took control of the city's 143 schools this month. About 67,000 students now attend classes in the D.C. public schools system.