The ink isn't dry on the proposals. The final program decisions aren't made. The president hasn't signed off on the figures. The funding hasn't been set. And nothing has been announced.

But it doesn't matter. The fight for the money President Carter may or may not give the cities in the urban strategy he is expected to reveal March 27 intensifies day by day.

Consider the letter John J. Gunther, executive director of the U.S. Conference of Mayors, wrote last week to Geno Baroni, the Housing and Urban Development Department's assistant secretary for neighborhoods.

Gunther, who speaks for mayors of larger cities - those with populations of at least 30,000 - wrote Baroni that the mayors feel "deep concern" because "the administration continues to indicate that it wants to help cities but intends to do this by giving incentives to states and [by] directly funding community groups."

Gunther, who sent a copy of his letter to White House domestic adviser Stuart Eisenstat, complained that "frankly, the mayors are very puzzled that there seems to be a lack of helping cities by helping cities."

Obviously Gunther had not reckoned with one Joseph F. Timilty, chairman of the new National Commission on Neighborhoods, which is examining federal and local policies that help or hurt neighborhoods.

Timilty somehow got hold of Gunther's letter and wrote him back Wednesday, saying, "For reasons I do not fully understand, your organization seems intent on defeating what is being called 'direct funding' of anybody other than city hall."

Timilty added, "I think you confuse helping cities with helping city halls. . .

"Your letter reflects a most unfortunate siege mentality - the embattled mayors with governors to the right of them, neighborhoods to the left of them, fighting valiantly for their slice of the pie."

In his "Dear Geno" letter, Gunther raised a problem that some mayors say they fear will result from direct federal funding of neighborhood projects.

"The mayors have clearly stated that they are not interested in being put in a veto position where community of neighborhood groups would come to the mayor and say, 'We can get federal money if you will sign off.'"

Gunther argued that since any direct federal funding to neighborhoods is expected to be limited, it would be unfair to city governments "to place any of the blame or give any of the credit to them in this matter."

Alluding to the fact that many mayors did not like the practice of giving most federal antipovety money in the 1960s to private nonprofit groups rather than city halls, Gunther concluded:

"Direct federal funding of communities or neighborhoods does not appear to be a move to bring about progress or harmony in cities."

In his "Dear Mr. Gunther" letter Timilty wrote, "The fact is that scores of federal programs benefiting urban areas already operate without the sign-off of the mayor. Many housing subsidies go directly to developers, or go through state housing finance agencies to carry out programs."

Timilty noted that states have often acted to frustrate city self-help efforts and the National Governors Association has suggested giving federal aid to states that help cities.

"Why don't you welcome this initiative instead of parochially seeing it as a mere invasion of turfz" Timilty's letter asked.

"Neighborhoods are part of cities. They are the essence of cities. Rather than seeing neighborhood groups as one more rival for the federal dollar, it is time for the Conference of Mayors to see nighborhoods as allies and to tailor urban policies to revitalize, the neighborhoods where people live," Timilty said.*