The District of Columbia city council voted last week for $280 million in budget cuts and called for a wage rollback and a two-week furlough for city employees.
In other preholiday decisions, the district selected a team of banks led by National Westminster Bank to back $250 million of short-term notes that the city plans to issue by yearend.
To help plug a $431 million budget shortfall that the city faces in fiscal 1995, the council unanimously approved cuts to many services. The cuts include aid to poor and pregnant women, emergency assistance for food and utilities, police and fire services, and summer school at the University of the District of Columbia.
The district's fiscal year begins Oct. 1.
The insurance for the $250 million note issue followed meetings between city officials and credit rating agencies and numerous banks two weeks ago, when the city tried to convince them of the district's creditworthiness.
In addition to National Westminster, the other members of the team backing the notes are the Toronto Dominion Bank, Canadian Imperial Bank of Commerce, First National Bank of Chicago, and Chemical Bank. Each carries credit ratings of A-1 or better, Mayor Sharon Pratt Kelly said in a statement.
Each of the five banks will insure $50 million with a letter of credit, Kelly said.
