A lawsuit filed last week by the city and county of San Francisco against BankAmerica Corp. "may only be the tip of the iceberg," according to the city attorney's office.

Alleging that BankAmerica mishandled municipal bond funds, charged inappropriate service fees, and committed other improprieties, the city is suing BankAmerica for $12 million to $17 million in damages. But the bank could be liable for more than $100 million in damages, the city said last week.

"The problems we've seen affect virtually every public entity and municipality in California," said Don Tickle, San Francisco's deputy city attorney.

The suit filed in San Francisco Superior Court alleges that the bank mishandled much of the city's bonds issued between 1985 and 1995 for low- income housing, schools, fire protection, and other public works.

It charges the bank with, among other things:

Keeping poor records, and in some cases destroying them, which led to a loss of control of hundreds of millions of dollars in bond monies. As a result, the bank did not know how much money it owed bondholders.

Withholding from various county agencies millions of dollars of unclaimed interest payments on bonds.

Engaging in a cover-up that "will shock the harshest critic of the banking industry," in the words of City Attorney Louise H. Renne.

The bank has acknowledged that mistakes were made, and it voluntarily refunded customers about $5 million, the bank said. It has also said that it would submit its records to an independent auditor to determine the extent of the necessary compensation.

"We think it's unfortunate that the city attorney's office would resort to litigation to resolve this matter and outrageous that they should make public statements which are so long on rhetoric and short on reality," said the bank's general counsel, James N. Roethe.

The bank had held discussions with the city in recent weeks to try to resolve the matter, but the talks broke down because the two sides were so far apart on the money involved. Mr. Tickle, the deputy city attorney, added that the bank had largely "stonewalled" the city in its attempt to gather more information.

The bank's talks with the state, which has not filed suit, are continuing. The city's suit joined a so-called whistleblower lawsuit filed in April 1995 by the bank's former vice president of corporate trust, which first brought the alleged improprieties to the attention of the city.

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