WASHINGTON -- The chairman of the reconvened Rivlin Commission yesterday announced a schedule for reappraising the District of Columbia's finances that is designed to avoid election-year politics and to complement an ongoing congressional review.

Also yesterday, District of Columbia officials unveiled a plan to save the city's public hospital, which is steadily draining the district of cash, by setting up a private corporation to run the facility.

Mayor Sharon Pratt Kelly called back the Rivlin Commission late last month to assess the district's progress toward carrying out the panel's original 1990 recommendations. The mayor also asked the panel to look at ways to "re-engineer" basic financial management practices and the general fund budget.

But perhaps of greatest interest is the panel's mission to review financial and governance issues, such as making the district a U.S. territory or annexing it to Maryland, according to commission chairman Richard Berendzen, a professor at American University and original chairman of the 1990 panel.

Formally called the Commission on Budget and Financial Priorities of the District of Columbia, the panel became known as the Rivlin Commission because Alice Rivlin took over when Berendzen stepped down in early 1990 for personal reasons. Rivlin, formerly a Brookings Institution senior fellow for economic studies, is deputy director of the Office of Management and Budget and recused herself from further participation.

The commission initially was convened to bring together business, community, religious, and academic representatives to review the city's budget and operations to address what the panel's final report called "an immediate fiscal crisis."

But "the crisis has not disappeared," KPMG Peat Marwick, a management consultant in Washington working with the commission, said in a statement.

"I don't think crisis is a strong enough word" to describe the state of district finances, Berendzen said yesterday.

Some of the most widely discussed 1990 recommendations included:

* Resolving with federal aid the district's huge unfunded pension liability;

* Expanding regional support of the district through a uniform regional transportation tax;

* Restructuring police operations;

* Reducing the number of district employees; and

* Restructuring the Department of Human Services, including consolidating the operations of St. Elizabeth's, the city's public psychiatric hospital, and the District of Columbia General Hospital.

More than 30 of the original 47 commissioners will participate in the reappraisal. A series of public community meetings is scheduled from May 16 through May 26.

The commission will complete the "score-carding" part of its work by July 15, Berendzen said. The panel will look at whether and to what extent the district carried out the 1990 recommendations, the fiscal impact of such action, and the reason for any inaction, he said.

Rep. Pete Stark D-Calif., and Rep. Julian Dixon, D-Calif., recently asked the U.S. General Accounting Office and the Congressional Budget Office to review the district's finances, including how well the Rivlin Commission recommendations have been carried out. The agencies are expected to hold back on this part of the review until the commission completes its work, Berendzen said.

The commission is not expected to finish its more in-depth financial and structural study until after the city election this fall, Berendzen said.

The district's public hospital is one of many areas of the commission's focus he said.

The Kelly Administration and Kurron of New York City, a hospital management group and consultant, yesterday announced a plan to set up a new "public benefits corporation" to run the hospital. The facility would retain its tax-exempt status, but it no longer would be an arm of the city government, said Ronald Weitz, a principal with Kurron.

Kurron reviewed the hospital's finances and management after the city council last October allowed the mayor to take over the troubled facility, with the proviso that she come up with interim and long-term strategies to assure financial viability. The mayor will seek to set up the new corporation with city council approval within 18 months, said Julius Johnson, head of operations and administration in the office of the city administrator.

The proposed public benefits corporation would administer a new integrated health system that includes the hospital and 15 neighborhood health centers that now are run by the city's department of human services. The mayor would appoint members of the corporation board and identify its mission, but the system would be run as a separate business without government interference, Weitz said at a news briefing.

That means the city no longer would have control over the number of employees, which would be reduced through attrition, and their wages, he said.

The district provided a $59 million payment in 1993 to the hospital to treat the uninsured and prisoners. It would continue to provide a yearly subsidy. The payment for fiscal 1994 has been reduced to $46.7 million, subject to congressional approval.

Johnson said that even with the $59 million subsidy, the hospital ended fiscal 1993 last September 30 with an operating deficit of more than $30 million.

The hospital borrowed $58 million from the city's operating fund from fiscal years 1990 through 1993, Weitz said. The new plan calls for the city to forgive the debt at a rate of $10 million a year, he said. Without the proposed improvements, operating losses are expected to total $238 million over the next five years, he said.

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