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Delegate Eleanor Holmes Norton, Representative Connie Morella
Exchange over whether Control Board powers should be extended
May 2001




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Letter from Norton, Williams, and Cropp WAMU interview excerpt Letter from Morella

May 8, 2001

The Honorable Constance Morella
Subcommittee on the District of Columbia
2228 Rayburn House Office Building
Washington, D.C. 20515

Dear Chairman Morella:

We appreciate your interest and attention to the continued fiscal viability of the District of Columbia. We write now because of our concern about press reports that you are considering congressionally created financial oversight mechanisms for the District of Columbia following the sunset of the control board on September 30, 2001. You recently told a WAMU reporter, "We canít just drop the control board concept . . . We want to look to something else that can be in place without a control board, as such, that even if it is sort of a shadow control board. Because, frankly, your financial advisory board would be serving the kind of function that one would think of for a different kind of control board." Although city officials are expected to testify at a hearing on June 8th in your subcommittee, we have not had the opportunity to generate publicly our own ideas or to be consulted about any federally imposed proposals. However, we are engaged in discussions in the city about safeguards we will enact to ensure that the District never again faces financial crisis or difficulty. Proposals from city officials assure conformance with District law, governance and the best financial management practices, as well as support from District residents and adherence to home rule.

As you are aware, the Financial Authority statute, supported on a bi-partisan basis in both Houses of Congress, automatically sunsets the Districtís control board following four years of balanced budgets. The District is entitled to the status quo ante once it has met the stated terms of the statute. City officials have more than met the necessary congressional requirements. Without compulsion from Congress, we have not only generated four years of balanced budgets as contemplated, but also healthy surpluses, two years ahead of the statutory congressional mandate. In addition, the District has eliminated its accumulated deficit, lifted its bond rating to investment grade, and met all of the requirements of a strict reserve fund created by the Congress.

Further, District operations and budgets continue to be scrutinized by four D.C. subcommittees, two in the House and two in the Senate, and all its laws are subject to inspection and disapproval by the Congress. Even without a control board, the District of Columbia must endure more financial and operational oversight than any jurisdiction in the country, making the governance of the city more cumbersome and costly than the governance of any jurisdiction in the United States. We ask that you respect the return of the Districtís limited home rule following the congressionally mandated conclusion of the control period by allowing any proposals to come from D.C. officials. We look forward to presenting our proposals at your upcoming hearing. 

Congresswoman Eleanor Holmes Norton
Mayor Anthony A. Williams
Chairman Linda W. Cropp

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HUGHES: House District of Columbiaís Subcommittee Chair Connie Morella says itís up to Congress to make the laws that will guide the next phase of D.C.ís financial oversight. But first, she says, Congress wants input from local officials. Morella says House and Senate District Subcommittees will hold a joint hearing in June to ask Control Board Chair Alice Rivlin, city officials and budget experts what they think.

MORELLA.: We want to know what is in store for the District of Columbia and what are our responsibilities. We canít just drop the control board concept and say everything will be fine. 

HUGHES: Among the options under consideration are an independent chief financial officer, which is already provided for under current law, a revenue commission, a financial advisory board, or a combination of these. Again, Congresswoman Morella.

MORELLA: We want to look to something else that can be in place without a control board, as such, that even if it is sort of a shadow control board. Because, frankly, your financial advisory board would be serving the kind of function that one would think of for a different kind of control board.

HUGHES: But some local officials think this discussion should be going on in District government offices, not on Capitol Hill.

EVANS: My advice to the Congress would be bow out of this. Let us, at the local level, decide what works best for us and then weíll move forward.

HUGHES: D.C. Councilman Jack Evans Chairs the Councilís Committee on Finance and Revenue.

EVANS: You know one of the problems I have with Congress involved in this at all--and I hope they stay out of it-- is they really donít have a close up understanding of whatís happening here.

HUGHES: Evan says local officials know what is happening in the District, and he contends that the city council and the mayor and not the Congress should initiate a process of deciding how D.C.ís finances will be managed after the financial control board is gone. D.C. Congressional Delegate Eleanor Holmes Norton agrees.

NORTON: I would support nothing that did not have the backing of the mayor and the council. And so if something came from up here, I would put it right back in the city and say give me your views on it. How should it be changed? Do you support it?

HUGHES: And local officials will be ready if that happens. Council member Evans says for the past year, he and other city officials have been talking about what kind of financial oversight is best for the District. They have concluded that an independent chief financial officer would do the job. Congress may also decide to simply solidify the role of an independent chief financial officer. Congresswoman Morella says ultimately, the Hill doesnít want to baby the District but she maintains that the Hill will continue to have a lot to say about D.C.ís finances in the post-control board era.

MORELLA: We do want the District of Columbia to make its own decisions, but we have a role to make sure that they donít fall into a financial abyss. And if we can help to strengthen the accountability, I think itís important. That really is Congressí role. Itís one of oversight. Not to dictate to it, but to look at it and say we want to help and this is what your experts are telling us needs to be done.

HUGHES: Most of those experts would say the District is in much better financial shape than when the financial control board was first imposed. But it is unclear whether that will be good enough for Congress. Morella says House and Senate subcommittees will likely write legislation by late September that sets into motion the next phase of financial oversight.

Sarah Hughes, WAMU News.

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CONTACT: Robert White, 202-225-3741


Chairwoman Morella Responds to Norton Letter

Congresswoman Connie Morella issued the following statement today in response to a letter sent to her by Congresswoman Eleanor Holmes Norton and signed by Mayor Anthony Williams and D.C. Council Chair Linda Cropp:

"When the D.C. Financial Control Board was established in 1995, the District of Columbia teetered on the brink of insolvency. Basic municipal services were not being fulfilled. Citizens had no faith in their government.

"Today, the District is perhaps as healthy as it has ever been. There's a budget surplus. Streets are plowed when it snows. Long lines at the Motor Vehicle bureau have vanished. And most importantly, people are moving back into the city for the first time in a generation.

"This dramatic change is testament not only to the financial and management controls enacted by the Control Board but to the hard work of dedicated city officials, particularly Congresswoman Norton on the Hill and Mayor Williams in City Hall.

"I do not want to see the gains that have been made over the past five years slip away. None of us do. Before the Control Board goes dormant at the end of this fiscal year, Congress, working with District leaders, will ensure that any necessary changes to strengthen the financial and/or management accountability of the D.C. government will be put in place.

"As chair of the House Oversight Subcommittee on the District of Columbia, I will make sure city leaders are made a vital part of that process."

Chairwoman Morella's letter to Congresswoman Norton follows:

May 8, 2001

The Honorable Eleanor Holmes Norton
2136 Rayburn House Office Building
Washington, D.C. 20515

Dear Congresswoman Norton:

Thank you for your letter of earlier today. I wanted to quickly respond to your concerns and clear up any misunderstandings you might have about my vision for the District of Columbia government in the post-Control Board era.

First, while your letter accurately quotes from a radio interview I recently gave, I do not think that incomplete excerpt fairly portrays my feelings on the subject. The program also quoted me as saying: "We do want the District of Columbia to make its own decisions. But we have a role to make sure they don't fall into a financial abyss, and if we can help to strengthen the accountability, I think it's important. That really is Congress's role, one of oversight, not to dictate."

Moreover, the piece also noted that I stressed Congress first wants to get input from District officials before taking any action - hence my desire for a Control Board hearing as early as possible this session - and I agreed with Councilman Jack Evans that a stronger Chief Financial Officer position could be an appropriate way to ensure that accountability.

To be clear, I enter the June 8th hearing with an open mind as to what mechanism- if anything - should be put in place once the Control Board goes dormant on Sept. 30. In addition, I was pleased that you stated the city is actively engaged in developing safeguards "to ensure the District never again faces financial crisis or difficulty." That, in a nutshell, is my goal as well. And while I have not been made aware of any specific proposals or action the city has taken in that regard, I greatly look forward to receiving and reviewing such initiatives.

Congresswoman Constance A. Morella
Subcommittee on the District of Columbia

cc: Mayor Anthony A. Williams
Council Chairwoman Linda W. Cropp

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