By David A. Vise
Washington Post Staff Writer
Friday, May 29, 1998; Page A01

In a final show of political force, the D.C. financial control board yesterday approved the most comprehensive overhaul of laws and regulations in District history and prepared to dismiss the heads of three major city agencies today.

At the final major public meeting led by outgoing Chairman Andrew F. Brimmer, the presidentially appointed panel issued 224 orders designed to make it easier for businesses to operate in the city. The board's actions would slash unemployment benefits, cut the pay injured workers receive, loosen restrictions on the kinds of products street vendors can sell, and relax environmental, business licensing and construction regulations.

The control board's moves, hailed by business executives and condemned by some D.C. Council members and labor leaders, are aimed at making the city's laws and regulations more similar to those in the Maryland and Virginia suburbs.

A. Scott Bolden, president of the D.C. Chamber of Commerce, said the control board's reforms would substantially improve the District's ability to attract and retain businesses and jobs. He said the control board acted after the D.C. Council and other city officials failed for decades to overturn an overly burdensome and complex regulatory system.

"This control board had the opportunity to go out in a blaze of shame or a blaze of glory," Bolden said. "This is a blaze of glory, not only for the business community, but for all residents."

The presidentially appointed panel scaled back unemployment benefits from about $300 a week to $250 a week – the same level as in Virginia – and eased zoning, permitting and other regulatory processes so that residents can put additions on their homes more easily and developers can move forward with small projects without costly delays. The board also revised and updated construction codes, raised the threshold for real estate projects requiring "environmental impact statements" from $1 million to $5 million, streamlined licensing of professionals, and ordered city officials to abolish all boards and commissions that no longer serve a useful purpose.

David Schlein, national vice president of the American Federation of Government Employees, said organized labor would aggressively fight the control board's attempt to reduce protections for workers.

"Any action taken by the control board, the council or anyone else that would cut unemployment or worker's compensation creates a severe hole in the safety net for D.C. workers," Schlein said. "There is no reason for us to be trying to race to the bottom when it comes to either of these matters. From our perspective, cutting unemployment compensation to the $250 Virginia pays now from $300 will make it impossible for workers to continue to pay their rent and continue to survive adequately during periods of layoffs."

D.C. Council member Harold Brazil (D-At Large) applauded the board's cutting of red tape, but a number of other council members denounced the panel's unanimous vote, which came just before the three-year terms of Brimmer and the four other members expire.

"I am appalled at this troubling swan song being forced on the District by the control board," said council member Kevin P. Chavous (D-Ward 7). In deciding to rewrite dozens of laws affecting city residents "as he heads for the exit, Andrew Brimmer leaves us no room for rebuttal. . . . These matters should not be rushed over, in a hit-and-run fashion, based on a clock ticking away at his tenure."

Council member Kathy Patterson (D-Ward 3) dashed off a strongly worded letter to Brimmer that attempted – unsuccessfully as it turned out – to persuade him not to take action on worker's compensation and other legislative matters pending before the council.

"You will clearly align yourselves with those who are willing to undermine responsible action by the duly-elected legislature," Patterson wrote. "Any action by the outgoing members of the [control board] would be difficult to defend."

The control board also is prepared to dismiss at least three heads of major District agencies today, people familiar with the matter said. The three are W. David Watts, director of the Department of Consumer and Regulatory Affairs; Michael Hernan, director of technology; and Allan S. Noonan, director of the Department of Public Health.

Last summer, Congress transferred the authority to hire and fire the heads of most city agencies from Mayor Marion Barry to the control board. Chief Management Officer Camille C. Barnett, who has run most of the District government on a day-to-day basis since January, recommended the removal of the three executives based on performance, and the board has decided to support her evaluation, sources said. If the individuals choose to resign, the control board will not fire them or take any other formal action on the matter.

Barnett, who declined comment on the personnel matters, said she strongly supports the control board's vote on regulatory reform and would be at the forefront of efforts to ensure that the changes ordered by the panel are put into place as rapidly as possible. Some of the control board's orders eliminate or modify regulations immediately; others require the board to consult with Congress for 90 days, during which time the mayor and D.C. Council have the opportunity to pass legislation that adheres to the control board's directives. If satisfactory legislation has not been approved by local officials at the end of the three months, the control board has the power to enact the new laws itself.

"I worked with the control board on the recommendations and think that they are going to speed things up in terms of city processes and make some more equitable," Barnett said. "I am looking forward to implementing them."

As part of its actions, the control board ordered Barry and the D.C. Council to reduce the benefits that people injured on the job receive to the levels paid in Maryland and Virginia, prompting labor leaders to vow that they will appeal the matter to Congress. The city's existing worker's compensation program – which provides long-term benefits to injured workers – provides benefits that officials say can be more than 10 times greater than those available in the suburbs.

But as Brimmer pointed out yesterday, the control board acted in response to a congressional mandate to review all city laws, rules and regulations that might impede business activity. The control board chairman said the board's actions, taken on the same day the panel approved the city's 1999 "consensus" budget, reflected the substantial financial and regulatory progress during his tenure.

The fiscal 1999 budget includes a major boost in funding for D.C. public schools, from an initial $460 million this year to $545 million next year. The $5.2 billion budget also projects a surplus of about $41 million.

Still, the excitement yesterday revolved around the regulatory initiative. Leaders of environmental groups said they were worried about the board's decision to allow developers to undertake projects of less than $5 million without doing a formal "environmental impact statement." But they were glad the board did not entirely gut a local environmental law. "I'm relieved," said Jim Dougherty, legal chairman of the local chapter of the Sierra Club.

Phil Mendelson, a trustee with the Committee of 100, a local civic organization, said he was puzzled by the board's apparent decision to permit people to begin construction projects in some instances before final approval.

"It is crazy," he said.

Others lauded the panel. "This is a major victory for the business community, said Ted Trabue, an official with the Greater Washington Board of Trade. "The control board [members] should truly be applauded for their actions today."

And they were. After the control board's unanimous vote on regulatory reform, the crowd gathered at the Martin Luther King Jr. Library responded with spontaneous applause.

"We've never heard any applause on anything," said control board member Joyce A. Ladner.