D.C. city council member Betty Ann Kane, who is running for mayor, accused the Barry administration yesterday of losing millions of dollars in potential city funds through bureaucratic bungling. As proof, she cited the case of a developer whose $98,800 check to the city treasury--hand delivered Feb. 18--has gone uncashed for 71 days.
On April 8, the developer, Steven L. Cymrot, transferred the funds to an interest-bearing account that has earned him $35.22 a day, or $641.09, Cymrot, a member of Kane's campaign finance committee, said yesterday. The city government has earned nothing.
"Because of sloppy management," Kane said, "the city lost the financial leverage of almost $100,000. Interest that is not earned is revenue that is forever lost. This is only one example of one large check mismanaged."
City Administrator Elijah B. Rogers acknowledged that the check, written to cover fees for converting an apartment building to condominiums, was in an envelope at the Department of Housing and Community Development until Tuesday and finally deposited late Thursday.
"That's inefficient, sloppy staff work and we're not going to tolerate it," he said after talking with Housing Director Robert L. Moore. "Bob Moore says he finds it inexcusable. I find it inexcusable. Bob Moore says appropriate disciplinary action will be taken." Rogers declined to say which employe was responsible or what action would be taken.
"It's an isolated case. We get thousands and thousands of checks every day," Rogers said.
"It's a 'Gotcha,' Moore said. "It's an unfortunate incident."
Barry declined comment.
The snafu over the check came just a week after the Barry administration, which came into office promising to eliminate "bumbling and bungling," found itself explaining how three city homeowners had each received astronomically inaccurate water bills for amounts ranging from $11,000 to nearly $15,000.
The bills were disclosed by Kane and another of Barry's rivals for the Democratic nomination for mayor, council member John Ray. City water officials said the three inaccurate water bills were isolated cases.
Kane contended yesterday that the city could earn at least $50 million a year in interest by efficiently investing its cash.
As an example, she said Fairfax County in Virginia has a $719 million budget and will earn about $35 million in interest this year. The city has a budget of about $1.9 billion and, according to Barry's revenue forecasts, is expected to earn about $14 million.
Noting that Barry had asked for authority to borrow $80 million from the U.S. Treasury to cover short term debts, Kane said the city could reduce such routine borrowing if it improved its cash flow through better handling of the checks it receives.
Cymrot said he is a general partner in several development projects on Capitol Hill, including a 43-unit building at 305 C St. NE, which is being converted by Capitol House Associates.
The uncashed check was a mandatory fee he paid the Department of Housing and Community Development's condominium conversion office at 1133 N. Capitol St. NE.
The money must be paid before a building can be certified for conversion. Cymrot said his organization received formal notification the first week in April that it could go ahead with the project.
However, when a second bank statement showed "too much money in my account," Cymrot said he talked with officials at Security National and they suggested he add $1,120 to the funds and open a day-to-day account that required a minimum $100,000 balance. The account will be closed when the check is presented for payment, he said.
Cymrot said his partnership had to borrow money at 18 percent to cover the city's conversion fee and that having the money longer than expected at 13 percent interest has effectively reduced his loan charge to 5 percent.
The next time he sends in a check, Cymrot said, "I guess the city will cash it."