Mayor Marion Barry, releasing the audit for the fiscal year ending Sept. 30, pronounced the District in good financial health yesterday and said a scheduled water rate increase for this year won't be necessary.
Barry, acknowledging some long-term financial problems resulting from the city's unfunded pension liability, said the District reduced its accumulated deficit by $20 million -- cutting it down to $204.6 million, a reduction of 46 percent in the last seven years.
Barry, who said last week he will seek "revenue enhancements" when he presents his 1989 budget next week, deflected questions yesterday about any possible tax increase.
Some D.C. Council members, while commending the Barry adminstration for meeting its financial obligations, said they are concerned that the District has juggled its outlays and reduced actual services, including housing and social services programs for the poor.
Council Chairman David A. Clarke, who yesterday circulated to council members additional details on spending in fiscal 1987, said he plans to examine closely how agencies are spending their money.
"It's not just that we balanced" the budget, Clarke said. "It's how we actually spent the money."
The mayor, saying the good financial news is a result of "hard work and commitment," said the city has been able to remove a $58 million deficit in its water and sewer fund.
He credited a five-year plan in rate increases -- developed by his adminstration and approved by the council -- with restoring financial health to the fund.
At the end of 1987, the fund had earned $53.9 million over expenses. As a result, Barry said, "we are able to hold off on a 10 percent increase scheduled for 1988."
Barry said he is concerned about the ever-rising cost of the city's pension funds. By the year 2004, about $700 million will be needed in the city's budget for pension payments, he said. The mayor said he will seek help from Congress to deal with the problem.
Council member John A. Wilson (D-Ward 2), who in December warned that heavy debt is eroding the city's financial base, said yesterday the city audit "wasn't good and it wasn't bad. In the short term, we were able to meet our obligations. In the long term, the debt and pensions are not in good shape."
Wilson said he was not surprised that the city spent less than it took in. "They had to underspend to have any money for the deficit," he said.
Clarke said he was pleased to see the reduction in the city's accumulated deficit, which he said the council initiated by amending the mayor's budget request to provide $15 million for that purpose.
He said the Department of Human Services underspent by $4.9 million its budget for programs such as Medicaid, Aid to Families with Dependent Children and general public assistance. However, the agency overspent its budget for building rent by $3.6 million.
Clarke said the housing department did not spend nearly $10 million allocated for subsidized programs such as tenant assistance. "I have questions about that," he said.
The council chairman said he also has questions about the school system's spending. According to Clarke, the system underspent its budget for personnel by $8.3 million, while overspending its budget for equipment and rental by $6.8 million.