The cash-strapped District of Columbia government, pressed for money to pay welfare, pensions, payroll and toher operating costs next month, has borrowed another $20 million from the U.S. Treasury. Treasury already had lent the city $20 million this year.
Yesterday's loan now puts the city $60 million in debt to the Treasury Department. The city borrowed $20 million last year that it has not repaid.
Ivanhoe Donaldson, general assistant to the mayor and head of a D.C. government cash management team, said the city intends to pay back the entire $60 million this fiscal year -- before Oct. 1. He said Mayor Marion Barry may reveal exactly how the loans will be repaid in his overall financial plan to be completed by July 20.
The loan underscored what city officials have called the District government's continuing problem of matching revenue to expenditures. Currently, the city is trying to avoid a projected $172 million budget deficit for this fiscal year. In addition, a decade of overspending and unpaid bills has produced an accumulated budget deficit of $284 million.
Before home rule, when Treasury Department was the city's only bank, government officials could write checks before depositing the funds. since the Treasury would always back up overdrafts. After 1978, when the city began dealing with private banks, officials have been scrambling to make ends meet, without the luxury of continuously overdrawing on checking accounts. e
The precise state of the city's cash flow crisis was impossible to determine yesterday. But D.C. Comptroller Al Hill said that "the city will meet all of its financial expenditures for the month of June." But Hill refused to discuss specifics. City Administrator Elijah B. Rogers said only, "We don't talk about cash flow."
Rogers asserted that District income-tax refunds, all scheduled to be mailed by July, would not be affected by the situation.
It is known that the city pays out about $28 million in payroll checks each month, in addition to $10 million in pension payments and $12 million in welfare checks.
Donaldson said no decision had been made on whether additional borrowing would be needed this year. Last year, the city borrowed a total of $60 million from the Treasury.
According to D.C. audition Matthew S. Watson, the city, before home rule, had a line of credit with the Treasury allowing it to draw up to $40 million annually. But that $40 million limit is not stated formally, Watson said, and the Treasury generally is not strict about how much the District borrows or when the loans are due.
Since home rule, when the local government was supposed to begin drawing on private banks, city officials have kept open that credit line to Treasury, using the short-term, interest-free loans to get them through lean years.
The Barry administration's use of the Treasury for short-term loans has ignited a continuing quarrel between the mayor and City Council members, who have continuously complained of not being kept informed about the city's financial situation.
Since the home rule charter never intended that the city government continue borrowing from the Treasury, there is no stipulation for the mayor to consult the council before securing a U.S. loan.
Council Chairman Arrington Dixon is pushing legislation that would require the mayor to seek council approval before borrowing money from any source. Dixon, in a memo to his 12 council colleagues, said yesterday's loan "points to the necessity for the council's rapid consideration" of his bill to restrict the mayor's borrowing authority.