Mr. DIXON. What would it run, over what you originally projected?

Mr. CALHOUN. Well, sir, you are putting me in a tough position. I don't want to get this put on the record, as I will be embarrassed. I will, if you insist, but I would rather not.

Mr. DIXON. I won't insist. Is it $51.8 million?
Mr. CALHOUN. That is close to it.

BUDGET REQUEST FOR OPTICAL AND DENTAL BENEFITS

Mr. DIXON. And you are requesting $1,489,000 for fiscal year 1988 to provide optical and dental benefits for non-union D.C. government employees and their dependents.

Mr. CALHOUN. Yes. The union employees over a period of years got the benefit and we put it in for the non-union employees. The Council passed the legislation and instituted the benefits in the middle of fiscal year 1986. We didn't have a chance to put it in the fiscal year 1987 budget. That was mandated in 1987 and appears for the first time in the FY 1988 budget.

Mr. DIXON. Mr. Regula, I don't know if you have any questions of Mr. Calhoun.

Mr. REGULA. No, Mr. Chairman.

YEARLY CONCERNS OVER REDUCING THE DEFICIT

Mr. DIXON. Thank you very much for coming up, Mr. Calhoun. My strong feeling about reducing the general fund deficit is not directed towards you.

Mr. CALHOUN. I understand.

Mr. DIXON. But directed toward a 5- or 6-year history where the Committee has been very concerned about reducing the deficit. Every year we have to tug on this thing and then we are 7 or 8 months into the fiscal year and we find the city on both sides of the fence. We know the District expects to receive $52 million in additional revenues based on the figures that have been reported to

us.

Now I am not so sure those revenues were not anticipated all along. Instead of collecting $1,981,613,000 as reported to us when we were considering the FY 1987 bill, the collections will be $2,033,480,000 for an increase of $51.8 million in fiscal year 1987.

PENDING AUTHORITY FOR SOME FY 1987 REVENUES

Mr. CALHOUN. Let me make a statement about the increasing revenues, which is part of the reason. Part of the increase in revenues depends on Council action. There are some pending authority items, that the Council is going to have to enact into legislation to make that revenue available. Some of it relates to the 1987 income tax we referred to and some relates to the utility tax that we lost as a result of the telephone company split-up.

So there are some actions required; and if the whole package comes together it might be around this figure. It might be around this figure, but the Council would have to do something to get all of the revenue. So it is not all actually collected yet.

Mr. DIXON. Okay. Now that I have calmed down, please don't take it personally, because it is not at all, and I don't think we have any other questions today. I thank you for your appearance.

REDUCTION IN DEFICIT OVER LAST SIX YEARS

Mr. CALHOUN. Thank you, sir. I just want to tell you we reduced the deficit $153 million over the last 6 years, you know, by ourselves, through hard work and diligence. We will continue to do so and I want to make that very clear.

Mr. COUGHLIN. With a little prodding.

Mr. CALHOUN. At times a little prodding is needed.

QUESTIONS SUBMITTED FOR THE RECORD

Mr. DIXON. Okay, we look forward to the supplemental. I have some more questions regarding the optical and dental benefits which I will submit to you to be answered for the record.

[The committee's questions and the District's response follow:]

OPTICAL AND DENTAL BENEFITS PLAN

QUESTION:

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1. How does this program work does the District Government pay the dentists and opticians directly or is this amount for health insurance premiums?

ANSWER:

1. The District does not pay the dentists and opticians directly nor is the amount requested for health insurance premiums. The Optical and Dental Benefits Plan has a contracted administrator, that was selected through open bids, to administer the Plan. The administrator's responsibilities include:

Informing non-union employees of the benefits of
the Plan;

Answering questions and assisting with claims,
making adjustments and adjudicating appeals;

Paying claims and assuring that all conditions are
met before payment is made;

Being available to the District for consultation;
Formulating specifications and costs of the Plan
for active participants;

Maintaining records, rules, regulation and
procedures for recording, reporting, paying, and
adjusting claims; and

Cooperating with auditors of the District in
examination of the Plan.

The District acts as the general supervisor of the Plan, which includes approving communications to employees, determining whether an employee is eligible to participate in the Plan, and making available to the administrator records and information essential to the administration of the Plan.

The general operation of the Plan is as follows:

Non-union employees and/or dependents receive
optical or dental services from a service
provider:

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Claims are prepared by a service provider and
forwarded to Plan administrator for payment;

Plan administrator receives claims and determines
payment allowance;

Plan administrator prepares payments for service
providers and informs the District of the total
amount of payments to be made;

The District transfers to the Plan's bank account
enough funds to cover the total amount of the
payments;

Administrator disburses payments to service
provider upon confirmation of funds transfer; and

The accounting transactions are recorded in the
District's Financial Management System (FMS).

The plan administrator is compensated at the rate of $1.00 per participant per month, excluding printing. All service provider claim costs associated with the Plan are paid on a dollar for dollar basis. Both administrator and claim cost have increased since more and more employees have become familiar with the Plan. The Plan currently covers approximately 12.400 non-union District employees.

THIS AGENCY WAS NOT REQUESTED TO PRESENT ORAL TESTIMONY.