McCall says N.Y.C. oversight board may be stepping up its meetings.

New York State Comptroller H. Carl McCall says that members of the state's Financial Control Board are planning additional meetings to discuss New York City's budget problems.

In a recent interview with The Bond Buyer, McCall said that a poll of the control board's seven members -- who include McCall, Gov. Mario M. Cuomo, Mayor Rudolph W. Giuliani and city Comptroller Alan Hevesi -- indicates that a majority believes the board should hold more meetings to discuss the city's budget problems, including a potential budget shortfall of between $600 million and $1 billion in fiscal 1995.

On July 11, the control board held its only scheduled meeting during the city's new fiscal year, which began July 1. At the meeting, McCall suggested that the city's long-term problems make additional sessions of the control board necessary.

Cuomo, the control board's chairman, said at the time that the board would consider McCall's request. A spokesman for the governor could not elaborate on Cuomo's position by press time.

"Indirectly, I got a reply from the governor that said, having polled the members that, yes, the members thought [additional meetings are] a good idea," McCall said. "As yet, a meeting hasn't been scheduled, but the response I have received is that there is a willingness to do it."

The additional hearings of the control board, which monitors city budgets and finances, could prove politically embarrassing to Giuliani.

McCall and other city fiscal monitors have supported the mayor's moves to reduce the size of the city's work force. But during his campaign against incumbent Mayor David N. Dinkins, Giuliani vowed to restore fiscal health to the city, and the meetings could underscore the city's weak fiscal condition.

Giuliani's budget director, Abraham Lackman, said he is "unaware of any agreement to have additional control board meetings." But Lackman added that McCall's statement may be politically motivated. "It is peculiar that Carl McCall didn't make the same calls when Mayor Dinkins was mayor," he said.

Giuliani is a Republican while Dinkins and McCall, who is running for re-election, are Democrats.

In fiscal 1993 and 1994, the control board's members met once to discuss the city's fiscal problems. In fiscal 1992, the board held five meetings.

"Mayor Giuliani has put together a very bold budget that means there are tremendous risks," said Allen J. Proctor, executive director of the control board. "For that reason alone, it make sense that the mayor and the members of the control board -- in their own capacities -- watch [the city's budget] carefully."

Wall Street bond analysts and other observers said they would favor additional meetings of the control board. Despite plans by Giuliani to cut the size of the city government, his $31.6 billion fiscal 1995 budget has been criticized as overly reliant on fiscal gimmicks.

In July, McCall issued a report showing that the city could face a fiscal 1995 budget gap of more than $700 million. McCall's study followed a report by the staff of the control board, detailing a potential $1 billion dollar gap in the city's fiscal 1995 budget.

In recent days, analysts at Standard & Poor's corp. have also sounded the alarm over the growth in the city's short-term borrowing, which they say is related to the city's budget delemma. Standard & Poor's rates city debt A-minus with a negative outlook.

Analysts for the rating company say the increase in short-term borrowing further underscores the unstable nature of the city's finances.

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