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  Q&A: The Financial Control Board

About the Board
Alice Rivlin
Alice M. Rivlin is the incoming chairman of the D.C. financial control board. (AP File Photo)

Post Stories
Board gets two new members.
D.C. opposes permanent panel.
President wants Rivlin for board.
Brimmer won't serve again.


Profiles
Alice M. Rivlin
Camille Barnett


Documents
Control board regulatory reform recommendations
By John P. Martin
Washingtonpost.com Writer
Friday, Aug. 7 1998

When District voters choose their next mayor this fall, they’ll elect a leader who’ll start his or her term as powerless as any mayor in decades.

Instead, most of the major government decisions will fall to the D.C. financial control board, a panel of five folks whom most voters wouldn’t recognize and didn’t choose to run their city.

Here’s a quick study on the board, its history, purpose and how long it might govern in the nation’s capital:

What is the control board?
The board is the body charged with overseeing the District government and shepherding it to financial stability. Its formal title is the District of Columbia Financial Responsibility and Management Assistance Authority.

When and why was it created?
Congress proposed the authority in 1995 after the city’s debt had climbed to $722 million and showed no signs of a turnaround. The House Resolution outlining the plan concluded the management and financial problems in Washington were "pervasive" and that citizens were being denied effective and efficient services in most areas.

President Clinton signed the bill on April 17, 1995, declaring: "The health of the city and the security of its citizens have been threatened by the financial crisis, and I applaud all those who have come together to work together to begin the road back."

Is such a takeover unusual?
Yes, but not unique. Other cities, most notably New York, have handed the reins of their government to oversight boards during fiscal crises. Two years ago, the mayor of Miami begged for Florida’s government to rescue that city through a takeover, but it did not. The concept of a control board is not even new to the District of Columbia. In 1873, Congress assumed power of the capital government after the District went bankrupt.

Who sits on the board?
The act specifies the board be comprised of five citizens appointed by the president and approved by Congress. Board members are unpaid, appointed for an initial term of three years, and must live or do business within the District. They cannot have worked in District government or have contracts or business dealings with the city.

Four of the original five members announced they would leave the board when their terms expired in 1998. Alice M. Rivlin, the former federal budget director, takes over as board chairman on Sept. 1. Joining her are lawyer Robert Watkins and Smithsonian undersecretary Constance B. Newman, an original board member who agreed to stay another year. The final two vacancies are being filled by Eugene Kinlow, a former D.C. school board member, and Darius Mans, a World Bank economist.

How does the board function?
It has the authority to hire and fire personnel, approve budgets and contracts, hold hearings, solicit public input and restructure the city government. Board members must also file an annual report to Congress detailing their activities and progress.

Has its role changed?
Yes. As its nickname suggests, the financial control board was established primarily to oversee the District’s fiscal recovery. But in August 1997, Congress and the president extended the board’s powers to nearly every facet of District government. In turn, the city received hundreds of millions of dollars in federal aide.

The decision diminished the influence of the D.C. Council and stripped Mayor Marion Barry of most of his executive power, transferring it to a new chief management officer who answers only to the board. Barry avoided the White House ceremony at which President Clinton signed the new rescue package, quipping: "It’s like going to watch your own death."

What has the control board done?
It abolished the city’s lottery board, fired the D.C. superintendent of schools and replaced the elected Board of Education with appointed trustees. It ousted longtime Barry ally Vernon Hawkins, head of the District’s massive Department of Human Services, which accounted for nearly one-third of the city’s budget. And the board created the positions of chief financial officer and chief management officer.

Has it been successful?
 
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Since the board came to power, hundreds of government workers have been fired. New faces now lead several major departments, including the police and school system. City officials reported a $185 million budget surplus for 1997 – two years before the District was required to balance its budget – and project an even higher surplus in 1998.

But some critics contend the District has lost any vestige of its right to self-rule (a claim that has spawned two lawsuits) and that the board has abused its powers and, through budget cuts, ruined the lives of thousands of District workers and citizens. Its hand-picked school superintendent resigned after a year amid accusations of ineffectiveness. An appeals court ruled it overstepped its boundaries in seizing control of the schools. Board members have been criticized for being aloof and autocratic.

What do the key mayoral candidates think of the control board?
The four Democrats vying for the Sept. 15 nomination are split. Anthony A. Williams, the former chief financial officer who joined the city government under the control board, supports it. Council member Jack Evans (Ward 2) calls the rescue package "the smartest thing we ever did."

But Council members Harold Brazil (At Large) and Kevin Chavous (Ward 7) have decried the city’s loss of control over its fate. "It was the Titanic and everyone who voted for it should go down with it," Brazil said at a candidates’ forum.

Council member Carol Schwartz (R-At Large), who is expected to win her party’s nomination for the mayoral seat, hasn’t directly attacked the board’s role but said the next mayor "must be allowed to run the city."

How long will the control board exist?
The authority is supposed to retain power until the district erases its debt and operates under a balanced budget for four consecutive fiscal years, which means at least through 1999. Congress could, however, change the requirements for dissolving the board or lessen its role.

How do I learn more?
Our special report on the control board includes profiles of its members, Post stories about the board, copies of the law creating it and links to the control board’s Web site.

© Copyright 1998 The Washington Post Company

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