D.C. leaders plan to overhaul taxicab regulations, explore ways to clean the environment and revamp services for at-risk youths this year, as they seek to rebound from a string of distractions last year.

After a brief holiday break, the D.C. Council was scheduled to return for its first legislative session Wednesday to start work on a host of major initiatives.

In the next 12 months, the council could reexamine the city’s recycling law, consider new job training and economic development tools and rewrite contracting rules. Mayor Vincent C. Gray (D) and council Chairman Kwame R. Brown (D) will also work on the fiscal 2013 budget, which might require $106 million in spending cuts or new revenues.

The year’s legislative work will coincide with the 2012 elections, when half of the body is up for reelection. Members Vincent B. Orange (D-At Large), Muriel Bowser (D-Ward 4), Jack Evans (D-Ward 2), Yvette M. Alexander (D-Ward 7) and Marion Barry (D-Ward 8) are seeking reelection in the April 3 Democratic primary. The general election, when Michael A. Brown (I-At Large) will also appear on the ballot, will be Nov. 6.

Although the council approved a 200-page ethics reform bill Dec. 20, the topic is likely to remain a major source of debate in this year’s elections. Adding to the uncertainty, the city’s political climate remains clouded by several open federal investigations.

Last month, the FBI and IRS raided the home of council member Harry Thomas Jr. (D-Ward 5) after allegations by D.C. Attorney General Irvin B. Nathan that he had diverted $300,000 in city money for his personal use.

The U.S. attorney’s office is also investigating whether money was properly accounted for in Brown’s 2008 reelection campaign. Allegations about Gray’s campaign and his administration’s hiring practices are also under federal investigation.

Thomas, Brown and Gray have denied wrongdoing and have stressed that the federal probes will not interfere with their work.

The month is expected to begin with a debate between Gray and Brown over how to spend a projected $42 million surplus in the current fiscal year.

The money was discovered because of higher than expected tax revenues. Brown wants to use it to shore up the city’s reserve account or carry it over to partially offset a predicted shortfall in the fiscal 2013 budget.

But in a Dec. 23 letter, Gray told Brown he wants the money for some priorities in the current year’s budget, including a $21 million gap in the D.C. public schools budget.

The tenor of that debate will set the stage for a broader discussion in the spring about whether the city will have to make additional budget cuts.

Administration officials and council members hope the stable local economy will translate into a brighter fiscal picture than Chief Financial Officer Natwar M. Gandhi’s initial estimates of a $106 million shortfall in fiscal 2013.

But council member Jim Graham (D-Ward 1), chairman of the Human Services Committee, said he is bracing to try to fight against additional cuts to social service programs. “I suspect there will be a struggle,” Graham said.

Council members are also preparing for an intense citywide debate over a proposal to overhaul the taxicab industry and mandate fuel-efficient vehicles.

Last month, Gray and fellow council members Mary M. Cheh (D-Ward 3) and Tommy Wells (D-Ward 6) introduced a proposal to set new training and environmental standards for the city’s 5,000-plus taxicab fleet. The legislation mandates credit-card payment options, satellite navigation systems and a single paint color for the city’s cabs.

To pay for the improvements, the District might assess a 50-cent surcharge on passengers. The taxicab industry could try to derail parts of the proposal.

Brown is also expected to spend the year continuing his efforts to bolster public education, particularly middle schools. On Jan. 23, Brown will oversee a hearing on his Highly Effective Teacher Incentive Act, which seeks to broaden incentives available to teachers who choose to work in low-income and underperforming schools.

D.C. Council member David A. Catania (I-At Large) intends to complete work on his legislation to revamp in the city’s youth behavioral health system in the aftermath of the March 2010 South Capitol Street shootings that left four teenagers dead.

“It’s been a massive undertaking,” Catania said. “We have a lot of unmet behavioral health needs in our city as a result of poverty, as a result of substance abuse. This is aimed at getting a hold of these children when they first show signs of behavioral problems.”

The council could also consider legislation by Bowser to reexamine city procedures for doling out hundreds of millions in contracts each year. Bowser aims to make the process simpler and more transparent, and to implement more anti-fraud safeguards.

Several environmental initiatives, including changes to the city’s recycling law and new tools to help promote urban farming, are also expected to appear on the council’s agenda this year.

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