The Alexandria City Council, deferring to opposition from the local business community, agreed this week to postpone final action on a controversial proposal that would require anyone seeking to do business with the city first to complete a tough financial disclosure statement. The proposal is aimed at heading off conflicts of interest such as the one that led to the June resignation of former vice mayor James P. Moran, city officials said.

The proposed legislation, sponsored by Democratic councilman Donald C. Casey, would require anyone submitting a bid to provide services, property or construction for the city to disclose any personal financial relationships with officials responsible for approving or administering the contract.

The Alexandria Chamber of Commerce and the Northern Virginia Builders Association have called the proposed legislation "overregulation," a "knee-jerk" response to the Moran affair and a possible inhibiting factor for businessmen wishing to deal with the city or run for city council.

"Businessmen would be afraid to talk to city council members because of conflict of interest," said Barton Middleton, executive vice president of the Chamber. The proposal could discourage businessmen from dealing with the city and "from running for city council," he said.

"I'm not aware of people other than Moran where this was a problem," said John O. Woods, head of an Alexandria engineering consulting firm and one of the businessmen who has expressed opposition to the bill. "I just don't like knee-jerk reactions without the proper amount of study and consideration."

The council voted Tuesday night to defer final action on the proposed ordinance until after a mid-November meeting with the Chamber, which represents about 60 city businesses, to discuss its concerns.

Casey acknowledges his proposal is a reaction to the resignation of Moran, who had been negotiating a business proposal with developer Peter C. Labovitz. Although that business venture had nothing to do with a parking lot project Labovitz was bidding on before the city council, Moran was charged with conflict of interest because he voted on that project without disclosing his business relationship with Labovitz.

Moran resigned as part of a plea bargain agreement after he pleaded no contest to the conflict of interest charge.

Casey says his proposal would prevent such incidents in the future by requiring disclosure up front by those dealing with the city.

Any property, ownership, income or liability valued at more than $10,000 or 3 percent of the equity of any business venture would have to be reported under the proposal, which also applies to close relatives of city officials and to appointed members of city boards and commissions.

Criminal sanctions originally in the proposed ordinance were eliminated after public protests. The proposal now contains only civil penalties that include disqualification as a bidder, suspension from bidding, rescinding of contracts for up to five years after their conclusion and the loss of profits on city-related ventures.

In a partisan vote of 4 to 2, with councilwoman Margaret Inman abstaining, council Democrats on Oct. 9 gave preliminary approval to the proposal. Mayor Charles E. Beatley, who has built his political career on controlling development in Alexandria, said he voted in favor of it because "I do think the key to good government is credibility with the citizens, and you can't have anybody on the council who has secret ties to developers."

The disclosure ordinance "reiterates a personal commitment to avoid conflicts," said Democratic vice mayor Patricia S. Ticer. "It provides a procedure we have not had before."

Both Ticer and Beatley said they would reconsider the proposal if the final version becomes too complicated or would impose a burden on businessmen.

The breadth of the proposal worries Republican councilman Carlyle C. Ring, who voiced concern with "the scope of things to be reported." Developers might have to search for and report business ties with as many as 50 city employes and close relatives when they want to deal with the city, Ring said.

"I just wonder how much of a burden that is going to place on prospective bidders," Ring said.