Mayor Marion Barry has rejected a recommendation from the District's financial consultants that he appoint a powerful deputy mayor for economic matters who would assume control of all of the city's budget and financial affairs.
Lazard-Freres, the New York investment bankers working closely with Barry in the search for a solution to that city's fiscal crisis, proposed about six weeks ago that he designate one person of unquestionable credentials to control all fiscal policy, operations and planning and to whom all other staff members would report. Barry said yesterday, however that he did not beleive such a step was necessary.
He said he now has a "better handle" on the District's financial problems than he did a year ago, and that the current staff is coping adequately with the budget crisis.
No "economic czar" is needed, Barry said during a brief conversation in his office, because "those department heads out there have finally realized that Al Hill is the controller and everything has to go through him."
All expenditures and additions to the city payroll must be cleared through Hill, but the Lazard recomendation went far beyond the daily management of expenses.
According to sources involved in the discussions, Lazard sought the appointment of a super-assistant to Barry of sufficient professional stature to commend the respect of the mayor's staff and the private financial community. It would be a person whose word would prevail on tax policy, investments, long-range planning and the budget.
Barry confirmed that he had discussed a position in his administration with Harold Bobys, a respected Washington accountant who is managing partner of the Alexander Grant & Co. office here. But, Barg said, Bobys did not want to take on a full-time assignment. No one else was approached, he said. The mayor said he has decided that the confusion that characterized his administration's initial response to the discovery of its budget deficit has been overcome. "I was confused myself," he said, "but now we have the facts."
Responsibility for the city's financial affairs is divided among several high-ranking officials, not all of whom admire and respect each other; no one person controls all the pieces of the puzzle as Budget Director Comer S. Coppie did in the administration of Walter E. Washington.
The key players, besides controllers Hill, are city administrator Elijah Rogers, assistant city administrator for financial management Edward G. Winner, budget and resource director Gladys Mack, Finance and Revenue Director Carolyn Smith, and the mayor's general assistant, Ivanhoe Donaldson, head of the cash-management team that reviews every voucher and purchase order.
In addition, two private firms -- Lazard and Arthur Anderson & Co., advise the city on fiscal matters.
Donaldson, the mayor's top assistant, said yesterday Franklin D. Raines, the Lazard representative who meets regularly with Barry, had "recommended that we ought to look at streamlining the structure of the city's financial management. The need to do that, he said, "is not something we are oblivious to," but he could not say "what form it will take eventually."
He said the Barry, administration had sent to the City Council proposals for a reorganization that would have transferred "treasury functions" out of the Department of Finance and Revenue into the office of the assistant city administrator for financial management.
But "the council had some problems with that and we are still working with them on it," Donaldson said.
The District government anticipates a budget deficit of $60 to 100 million for the current fiscal year, which ends Sept. 30, on top of a cumulative deficit from previous years calculated by Arthur Anderson auditors at $284 million.
Barry has scheduled a television speeh for Monday night in which he is to reval his program for dealing with the deficits.