.DC. COUNCIL member John A. Wilson has just sounded a financial alarm at city hall -- with good cause. His message: heavy debt is eroding the city's tax base. One big reason: large, possibly excessive, fees being paid to law firms and investment bankers for handling the city's three-year-old bond program. Mr. Wilson speaks here as chairman of the council's finance and revenue committee, with serious concerns about the ability of the city government and local taxpayers to afford the "rapidly escalating" debt.

In a detailed "white paper" on the city's debt, Mr. Wilson reports that various firms have received nearly $56 million in fees from the city since 1984, and asserts that the city could have saved $18 million in that period by reducing the fees from about 3 percent of bond sales to 2 percent. In addition to the size of these fees, the number of parties involved in the handling may be excessive: financial advisers, bond counsel and underwriters often have overlapping roles, and many other governments have been able to do without some of these services -- or to do some of this work themselves.

Mr. Wilson also is calling for council reviews of nearly 200 current capital projects that are not yet under construction as well as others contemplated for future years, to determine if these projects are still needed; to see what could be done to cut their costs; and to explore other financing possibilities. The report proposes a new look at the city's unfunded pension liability too.

The Wilson report is not a finding of catastrophic financial neglect or scandal, but it is an important alert. Mayor Barry has taken constructive steps to change some financial practices and to get control over spending for capital projects. But the findings of excessive fees should point to more competitive bidding on contracts, closer scrutiny of debt levels and revisions in the handling of bond programs. Mr. Barry should take the Wilson report as constructive criticism -- not as cause for a political rebuttal.