For months now, ever since the D.C. budget crisis made its first public appearance, the city has been cross-hatched with pointing fingers and conflicting theories of who or what is to blame.
In fact the current crisis is a combination of problems coming together and catching up with the city in a time of rising expectations, shrinking resources and economic concerns.
"It was evolutionary. It didn't happen overnight," said Gladys Mack, the city's budget director. And in fact, in almost any discussion of the city's financial woes, the talk goes back to 1969 and weaves and bobs through a series of complications.
Here are some questions and answers about the current fiscal crunch.
QUESTION: How did the city get out on such a financial limb?
ANSWER: A number of things contributed to the city's current cash-short position. Anticipated revenues were overestimated. Inflation caught up with the city. And District taxpayers now are picking up the bills for expensive decisions made years before.
Q: What kinds of decisions?
A: One was a decision made in 1969 to put the city on a cash-accounting basis, which has allowed the city to postpone accounting for future costs until the costs caught up with the city. In retrospect, both the city's former budget director and Mack say that the city might be better served by a more conservative form of accounting.
Q: What else?
A: The city also is paying for an expensive major public works program undertaken during the administration of Mayor Walter E. Washington. Among other things, the program included a new jail to replace a 100-year-old, overcrowded detention center, a new central library and numberous branch libraries, the University of the District of Columbia, a number of public schools and swimming pools, and a new local court complex.
Q: Did we need all that?
A: Most of it. The public school building program was based on estimates of pupil growth that had to be revised downward later, but some of the buildings included were replacements for worn-out facilities.
Q: What does it cost?
A: "The cost of the city's mortgages is running about $120 million a year," said Mack. "For any ordinary city, that is an extraordinary amount of debt, and it is large. But before 1968 we had virtually no capital improvement program.
"It was a very ambitious program which started and proceeded at a fast rate," she said. In retrospect, "it would have been better if those capital expenditures had been spread over a longer period of time." But Mack pointed out that times were different then. The city was just moving out of the shadow of the federal government toward home rule.
"It was a government that really had an opportunity to serve citizens in a way that was responsive. The government took that on as a mission and took great pride in being able to serve the community -- and did a good job," she said.
Mack's predecessor, Comer Coppie, also makes the point that providing better facilities has helped keep people in the city and attract others back, adding to the city's tax base.
Q: Isn't the city's pension fund a major problem?
A: The pension fund is not a major part of the current cash-flow problem, but it is a serious long-term problem. The Congress of the United States set up a pension program but made no provisions for funding future benefits. The city and federal government now are addressing that shortcoming together.
Q: How much control does the federal government have over the city's finances?
A: Considerable. When the city first planned to go to the bond market to raise money in 1975, Sen. Thomas A. Eagleton stepped in and set in motion a series of events that will lead to the city's first full audit next year. The federal government also sets the level of the federal government also sets the level of the federal payment, an unpredictable part of the city's revenues. t(President Carter has proposed setting the federal payment by formula, which city officials have sought for years and which would add more predictability to the budget process." In addition, Congress specifically ruled out any commuter tax when it granted the city home rule, so the city is short at least one option when it raises money.
On the other hand, the city's finances are not as tied to the federal government as they once were. As recently as 1969, the National Zoo was included in the city's budget, as were the costs of Park Police and maintenance in National Capital Parks in D.C.
Until April 1978, the city's money was kept in the federal Treasury rather than in banks.
The federal governement helps build the budget framework, but how the city manages is money within that framework reflects on the city.
Q: So how does the city do?
A: It could be better, city officials concede. Adverse court decisions that wiped out millions of dollars in anticipated revenues and shortfalls in collections of water and sewer taxes and parking fines compounded the problems, but problems would have arisen anyway.
City officials blame cash management problems in part on lack of experience.
When the city's funds were in the U.S. Treasury, "We didn't have to balance our checkbook," Mack said. "We didn't have to worry about cash flow to make sure we covered the peaks and valleys. The federal Treasury wrote all our checks, and there was no need to develop cash management expertise."
Q: Doesn't the city have a computerized financial management system that was supposed to solve all the problems?
A: No.The city has a computerized accounting system called the Financial Management System, but "computers don't manage finances, people do," said Edward G. Winter, the city official in charge of the system. It is a computerized accounting system, which will provide the city with more information about the state of its finance and which is supposed to make the city's accounts auditable.
This accounting system is the center around which other systems will be built, including water and sewer billing systems, which should help the city mangage its finances.
Bugs in the system have become apparent over the last couple of months as it has gone into operation. Some of them are start-up problems. Others reflect a lack of planning by the city about what it wanted the system to do and poor training of employees who must work with it, said Winter.
"We're at a point now where it is the only system we've got, " he said. The other system, an antiquated, paper-and-pen setup that kept imperfect track of how the city's finances worked, "is somewhere in the Lorton landfill."