Washington will soon have its own museum to document local history and neighborhood evolution.

Mayor Marion Barry signed the bill last week authorizing a City Museum to preserve local history.

The museum will be housed in the Washington Humanities and Arts Center, 7th and E streets NW, in the Lansburg Building, leased by the District last month.

The museum will be established there next year.

A ten-member board of directors, appointed by the mayor, will set policy and raise money for the museum. Operating funds are to be raised from federal, private and corporate sources. Earl James, administrator of the Decatur and Wilson House museums, who spearheaded the five-year campaign to establish the museum, said the board is trying to raise at least $100,000 to open the museum and build a $2 million to $3 million budget.

So far, the only sign of the museum is a small photographic exhibition entitled "Two Centuries of Change: The Idea of Downtown Washington," which has been touring the city since September. The exhibit, supported by a $59,000 grant from the National Endownment for the Humanities, will be at the Visitor's Center in Alexandria throughout the summer.

James said the next step is to expand the collection. The entire museum collection now consists of the photo exhibit, plus some stone carvings and two ornate brass doors from the old Riggs Bank at 17th and G streets NW.

During the bill signing ceremony last week, City Council member Betty Ann Kane donated a portrait of Washington's last governor, Alexander "Boss" Shephered, known for civic improvements which put the city deeply into debt in the 1870s.

James said he envisions future exhibits on individuals, neighborhoods, natural history and art depicting the growth of the city and perhaps a small gallery for contemporary Washington artists to display their work.

Friday's bill signing was a landmark day for the city, Barry said, adding, "All major capital cities of the world have a city museum. We need a municipal museum of our own which depicts the local city in addition to the national character." Much of the District's history is lost every day, he said.

The City Museum will be unlike Washington's existing museums which have a national or federal focus, James said. It will also differ from institutions like the Columbia Historical Society and the Moorland-Spingarn Collection at Howard University which have collections on District history.

According to local historians, material in those collections is primarily archival while the City Museum will exhibit heirlooms, clothing, furniture and other objects.

The city museum, which was approved by the City Council, will be a nonprofit venture. And while the District government can appropriate money to the city's official museum, the current budget crisis will prevent any money being appropriated this year.

"Ever since the bicentennial, there's been a great deal of interest in local history," said Cathy Smith, who helped design a textbook on D.C. history and attended the bill signing.

"You see it nationally as well. It's tied up with the search for community and neighborhood."