- September 08, 2005 07:59 PM EDT

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Imagine a world where no one called during dinner to discuss your long-distance service. No more running to the phone to find dead air when you get there. No more messages on your answering machine inviting you to a suspicious "Disney" vacation.

For years consumers could only dream of such freedom from telemarketers. This year, however, it might actually happen.

Money for a national do-not-call list was approved Feb. 20 when President Bush signed a government-wide spending bill. Federal Trade Commission Chairman Timothy Muris says consumers can start signing up for the free service this summer and the registry should be working by September.

Over the last decade the telemarketing industry has grown from an annoying steady stream of sales pitches to what most people find an unbearable, unstoppable torrent.

The Direct Marketing Association, the trade group of telemarketers, which had been hoping to stave off regulation, started a do-not-call list service back in 1985. People who did not want to receive sales calls could sign up and reputable telemarketers would take them off their lists. But it did not push the list very hard.

Consumers have tried all kinds of amusing schemes and electronic tricks to fight telemarketers. The main strategy is to waste the telemarketers' time so that telemarketing becomes less financially attractive.

Some consumers even pay for a $40 "telezapper" that promises to eliminate your number from telemarketers' computers. There is some science to these devices. Telemarketers use a computer to mass-dial. The tones that the phone zapper emits are not secret and mysterious. They are the same tones you hear when you call a disconnected number. In other words, the tones will tell the telemarketing computer you've moved. You don't have to buy a phone zapper, you can just download the tones at junkbusters.com and put them on your answering machine.

Consumer rage over telemarketers swelled over the last decade, but the federal government, persuaded by lobbyists from banks, credit card companies and phone companies, did nothing.

Finally, states started listening to consumers and cracked down themselves. The state do-not-call lists are no longer voluntary. Telemarketers must pay for the lists and use them. If they call people on the list, they get fined.

Last summer, Illinois finally jumped in to the game. By the time the service is scheduled to be up and running in July, 26 other states, inlcuding Wisconsin and Indiana, will have programs in place. The state programs have proved popular. According to a survey by the AARP, 40 percent of Missouri's residents have signed up.

Before money for the federal list was approved, the Illinois Commerce Commission began planning Illinois' program, known as the Restricted Call Registry.

"Right now, we're proceeding with the state mandate to set up the list, but we're also monitoring developments at the federal level," said Beth Bosch, spokeswoman for the commission.

Ideally, the databases eventually would be one and the same, but those logistics haven't been worked out, she said, noting that the emphasis is on simplifying the process for consumers.

"We still have the Illinois law requiring us to move forward with this program and that's what we're doing," she said.

For the Illinois list, consumers will pay $5 to join (which may go down in time) and telemarketers not only have to use the list, they have to pay $1,000 to get it. Right now the commerce commission is looking for a vendor to manage the list. Until they do, there is no way to sign up.

"We had many people who called immediately," as soon as the legislation passed, said Bosch. They continue to call, clamoring for the relief the list would provide. Consumers will start seeing advertisements this spring about how to sign up, and the commission hopes to have the program started by July 1.

The federal list will have the usual limits. It will not cover some of the most intrusive callers, those from businesses like phone companies that are regulated by the Federal Communications Commission and not the Federal Trade Commission. You'll also still hear from companies that claim to have "an existing relationship" with you.

At first, some legislators balked at the $16 million start-up pricetag. In December Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.) said they didn't see the need. Consumers, thinking these legislators ought to get a taste of what it's like to be in the sights of a telemarketer, bombarded their offices with telephone calls and they relented.

People can enroll in the do-not-call registry through the Internet or a toll-free number. They would need to renew their registration every five years. The program will eventually be funded by fees from telemarketers, but it's free for consumers to join.

Telemarketers would have to check the list every three months to determine who does not want to be called. Telemarketers who call listed people could be find up to $11,000 for each violation.

The FTC, which received 64,000 comments on the proposal, nearly all enthusiastic, expects up to 80 million people to join.

Telemarketers recently sued to block the list, arguing that it would violate their free speech rights. But judges so far have rejected telemarketers' attempts to equate their offers of cheap long distance with serious political discourse. So far appeals courts have backed the state laws. Case law has held that regulations on commercial speech are fine as long as they are narrowly drawn and serve a strong interest.

"The FTC is singling out this form of advertising now, what will be next?" DMA President Robert Weintzen said in a statement.

Fending off telemarketers

There's more than one way to get rid of telemarketers:

- Get on the current voluntary do-not-call list. The Direct Marketing Association runs lists to stop three annoying kinds of sales pitches: junk mail, spam and telemarketing calls. Go to their Web site, www.dmaconsumers.org, and sign up for all three lists. You can get the forms to mail in there.

If you're not online, you can also write them a postcard with your name, full address, phone number and signature. To get off telemarketing lists, write to: Direct Marketing Association, Telephone Preference Service, P.O. Box 1559, Carmel, N.Y. 10512. To get off mailing lists, write to: Direct Marketing Association, Mail Preference Service, P.O. Box 643, Carmel, N.Y. 10512.

- Join Illinois' Restricted Call Registry, which is expected to start up in July. Go to www.icc.state.il.us/rcr/home.aspx.

- Join the national list. The Federal Trade Commission will announce rolling eight-week phone enrollment periods for eight national regions. It's too early to sign up now, but keep posted at www.ftc.gov/donotcall.

- When telemarketers call, don't just hang up. Say the magic words: "Put me on your do-not-call list."

-- Carol Vinzant
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When average investors become aware of hedge funds, it's usually because of trouble, such as the near collapse in 1998 of Long Term Capital or the multimillion-dollar loss incurred last year by the Art Institute of Chicago.

But as the bear market grinds on, hedge funds have an improved image because they are either making money or at least not losing it nearly as fast as everyone else.

Thus far this year, the Hennessee Hedge Fund Index, which tracks a broad spectrum of hedge funds, was down only 4.8 percent, only about a fourth of the loss of the broad market as measured by the Standard & Poor's 500 index. Overall, 94 percent of the 3,000-some funds that New York-based Hennessee Hedge Fund Advisory Group tracks have beaten the S&P 500 this year.

When the rules for mutual funds were drawn up in 1940, regulators, still reeling from the financial chicanery of the 1929 crash, set up rules to protect investors.

They figured rich and sophisticated investors could take care of themselves and were allowed to invest in the then-fledgling hedge fund industry without government protection.

Only decades later did investors come to realize that the strategy known as hedging wasn't necessarily as risky as it was perceived, and today more middle-income investors are trying to elbow their way into what was once considered a club only for the rich.

Over the last decade, the hedge fund industry has grown exponentially. It now stands at about $500 billion to $600 billion, up from only $20 billion in 1990.

Despite the new interest, the public still knows little about how hedge funds operate, partly because of a Securities and Exchange Commission regulation that prohibits them from soliciting investors.

Hedging is the practice of limiting risk by both buying stocks long and selling them short.

Hennessee divides funds into 23 strategy categories, including short-selling, event driven and merger arbitrage.

"Anyone who is lumping hedge funds together, and addressing them as a collective group, does not understand hedge funds," said Joe Nicholas, author of "Investing in Hedge Funds" and chairman of the HFR Group of Companies, which analyzes hedge funds.

The funds that have done best this year are the funds that sell short. According to Hennessee, such funds are up about 18 percent this year.

Much of the resentment against the industry is bred by this technique, in which an investor borrows stock from a broker and sells it in the belief the stock will drop. When it does, he buys it back for a cheaper price and pockets the difference.

Main Street investors used to have the idea that shorting stock was "un-American," said Charles Gradante, the chief executive of Hennessee.

The hedge fund managers that became famous on Wall Street--Michael Steinhardt, George Soros, Julian Robertson--all got rich making big directional bets on which way the market would go, especially by betting it would go down.

"The manner in which they made money," said Gradante, "led people to believe that hedge funds were cowboys, wild and woolly."

But today those big directional bets make up only 5 percent of the industry, and though they might not be the Wild West anymore, hedge funds are still a long way from mutual funds.

Some big differences

The main differences in regulation between the two is that mutual funds can't leverage as much--that is, bet more than they have--can't sell short as much and can't let managers take a cut of performance instead of a flat percent of assets.

But the hedge fund camp takes exception to the notion that they are totally unregulated. Jeffrey Kuchta, chairman of Chicago-based Hedge Advisors Inc., points out that many hedge funds have to report their holdings to the SEC.

"First and foremost, hedge funds are not unregulated," he said. "You can't just go out there and run roughshod and do insider trading."

Hedge fund fees are much higher than those of mutual funds. A typical mutual fund might take 1.3 percent of assets. The hedge fund manager might take 1 percent, then 20 percent of profits. The people paying higher fees are not being bamboozled; the higher fees allow them access to the funds with the highest returns, and the ability to try exotic strategies.

Mutual fund companies, worried about losing both their talented managers and their investors, have been offering up vehicles that could be described as hedge fund lite: They stray into hedge fund strategies without giving up the regulated structure. About a dozen funds like this exist, such as the Merger Fund, the Arbitrage Fund, and Boston Partners Long-Short Equity.

These funds typically charge much larger set fees that, unlike with hedge funds, won't go down if the fund doesn't make money.

Last summer Charles Schwab rolled out Schwab's Hedged Equity Fund, which shorts 20 percent of its assets. The fund requires a $25,000 minimum investment, rich by most standards, but not those of the hedge fund industry where the typical minimum is $1 million.

So why would small investors be trying to break down the doors to hedge funds if the cost is higher?

In a word: returns. According to Van Hedge Fund Advisors, through September about half of hedge funds actually showed gains while the average mutual fund lost one-quarter of its value.

Nicholas argues that hedge funds don't pose any more of a problem for unsophisticated investors that other investment vehicles such as penny stocks.

He thinks full and clear disclosure, not prohibitions, should be the way to keep investors safe in hedge funds.

"Certainly, anyone who is allowed to buy stocks should be allowed to buy hedge funds," Nicholas says. "Are stocks appropriate for widows or orphans?"
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To economists, Chicago is not known for its hot dogs, the oratory of its politicians or its ill-fated North Side baseball team, but for how fervently scholars on the South Side embrace the notion that markets are rational and efficient.

The University of Chicago won more Nobel Prizes in economics in the 1990s than the Bulls did NBA championships. Milton Friedman, Merton Miller, Myron Scholes and Eugene Fama are just a few of the economists on the team, all with the stature of a Michael Jordan, or at least maybe a Scottie Pippen, in the finance world.

The "Chicago School" of economics is known as a math-heavy, conservative theory that holds that people can be predicted to act in their own self-interest.

However, in 1995 this bastion of conservative economics thought hired Richard Thaler, a prominent economist from the opposing camp: behavioral economists. The behaviorists think economics is more unpredictable because people don't always act the way they should. Procrastination, lack of self-control, overconfidence, bad decisions and sometimes even generosity all get in the way.

This made discussions at the school, already boisterous, even more fun.

"Most of the finance faculty are uncommitted to either camp, which means they can and do criticize both groups," Thaler said. "We like to say that we all receive the same hostile reaction to our ideas. Gene Fama gets beat up in workshops just like anyone else."

Fama himself thinks that's all just part of the intellectual tradition.

"Everybody argues at Chicago, with the goal of eventually being vindicated by data," he said.

Behavioral economics is in vogue now. Behavioral research tends to be much more accessible, even sexy, compared to traditional economics. Terry Odean of the University of California-Berkeley, for example, has shown that "trading is hazardous to your wealth," that is, the more investors trade, the worse they tend to do in the market. Odean went on to find a certain class of investor who is prone to this "overconfidence" in its ability to outsmart professionals: men.

As the market has fallen, the public has gravitated even more toward the behavioral way of thinking because it offers a more satisfying explanation of the bursting tech bubble.

To the efficient market camp, stock prices are rational because they reflect all the currently available information. So, they were as rational in 2000 as they are now, even though they are now 50 percent to 75 percent cheaper and investors have lost $7 billion.

"Bubbles are identified on hindsight," Fama said. "Tech prices, like all prices, are correct now, given currently available information."

Behaviorist think that prices were irrational, that people got greedy and started expecting the market to continue to crank out the double-digit returns of the bull market.

"As their gains accumulated, [investors] developed what I have called a 'house money' mentality," said Thaler, "thinking that the money they had made in the last few years offered a psychological cushion against future losses, much like gamblers who have won some money early in the night feel as if they are free to gamble."

The schools, however, are not always polar opposites. The theories try to explain different aspect of economics: The efficient market theory tries to explain how stocks are priced, while behavioral economists focus on how individuals behave (and misbehave) with their money.

Both take a dim view of individual investors who think that they can beat the market, and both offer some lessons that individual investors can learn and incorporate in their own finances.

The efficient market theory holds that you can't beat the market because whatever information or insight you have into a stock (aside from the illegal variety of hot tip that former ImClone Chief Executive Sam Waksal is accused of dispensing), that information is already built into the stock price. While some money managers may have a winning streak, very few, if any, can beat the market averages over a meaningful amount of time.

So, if you can't beat the market, the next best thing is to join it. Buy an index fund, which will buy all the stocks in a broad market index such as the Standard & Poor's 500 or the Wilshire 5000. As an added bonus, having a machine do the work cuts expenses by more than 1 percent a year.

The Vanguard 500 index is the most popular fund in the country because so many investors have caught on to the genius of indexing. Fama, himself an index investor, is pleased. The popularity of index funds has saved investors untold millions.

The behavioral school has more direct advice on how to watch yourself and keep yourself from making typical human mistakes.

Behaviorists note how poorly people save for their own retirement, which they would not do if correctly acting in their own self-interest. To fix the problem, Thaler got employees at a midsize company to agree to commit part of their future raises to savings. The vast majority of workers signed up and stuck with the plan, increasing the group's saving rate from 3.5 percent to 11.6 percent over 28 months..

Whether people can successfully commit to this kind of plan without an external mechanism is unclear. Thaler fears that the promise may fall the way of most New Year's resolutions.

Individual investors tend to let their emotions get in the way of their stock decisions, too. Thaler said people are so reluctant to admit they made a mistake that they hold onto their losing stocks, which often then slip further down.

Thaler co-manages two mutual funds, one of which tries to "identify mispriced securities that result from behavioral biases of key market participants." The Behavioral Growth Fund has offered an annual return of 3.7 percent since it started at the end of 1997.

One of the benefits of applied behavioral economics is that it can get investors to act rationally and in their own self-interest, the way that the Chicago School says they should have been acting anyway. Few are expecting that the market will be able to be tamed or trained.

As J.P. Morgan once said, "The market can remain irrational longer than you can remain solvent."
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If you haven't tried it yet, eBay, the mammoth online auction site, may seem like a new national sport that everyone except you has learned to play. The site has 42.4 million registered users who are collectively buying, selling and bidding on about 7 million items at any given moment.

Last year eBay, one of the few Internet successes, sold $5 billion worth of treasures and trash. EBay puts the power of the computer and the Internet behind the temptation of the garage sale.

However obscure your obsession, eBay will indulge it. Someone would have to spend years trolling garage sales to find the likes of, say, a postcard of the West Side stadium where the Cubs played before moving to Wrigley Field. On eBay that desire can be satisfied in seconds. Although collectibles seem to weigh heavily on the minds of eBay shoppers, brave and industrious shoppers can also find everything from new designer clothes to electronics.

When the online auction craze started in the mid-1990s, eBay was one of dozens of sites; now the field has narrowed. Specialty sites offer their own auctions and a few withered general competitors remain, such as Yahoo Auctions. To really find something rare, however, a dedicated shopper is going to have to learn the eBay system. So, how do you get set up?

The first step is simply to get yourself an account, which will require you to come up with a user name, a credit card and an email address. After you buy something, you will have to make arrangements to pay the seller yourself.

But be warned: There is a small risk--exactly how small eBay isn't saying--that you will end up feeling ripped off by your purchase. If so, there is not usually an easy mechanism to complain, let alone find a remedy. And the seller will be ill-equipped to handle a direct credit card payment.

So, Tip No. 1 is that your shopping life will be made infinitely easier if you hook your credit card up to an online person-to-person credit card payment service, so you can zap virtually anyone money. PayPal is the main one; Billpoint is eBay's version. The services take a tiny cut from the seller but cut down enormously on your paperwork and hassle.

If you're unacquainted with eBay, stroll around the site. Use the "Browse" features to look at all the categories of things out there. By going deeper and deeper into subcategories, for example, "Books, non-fiction, travel," you effectively walk down the aisle of a store. You will quickly find, however, that the aisles are about three miles long.

That leads us to Tip No. 2: Browsing is for suckers; search instead. Browse if you want to see all 26,000 Beanie Babies for sale, or if you want to subject yourself to the electronic version of a retail barker: eBay's "featured items." Sellers pay extra so they pop up at the top of the screen.

Tip No. 3: Regard anything tagged "featured item" as suspect. One recent example was a diet plan that promised a weight loss of 99 pounds.

To avoid a browsing odyssey, figure out what you're looking for and use "Search." Try to remember every obscure area of interest you have. Look for memorabilia from your hometown, goods emblazoned with your last name or rare plants for your garden.

Remember also that this is not a perfect system. Your search may turn up more or less items than you suspect. EBay's computers routinely miss items that should pop up in your search. If a search is turning up too few items, check your spelling. If you happen upon an item you like that has been misspelled, you may be at a bidding advantage because other bidders may not find it.

Sorting through the 'junk'

Whatever you are looking for you will soon find another category of junk colliding with your search terms. If you want Lego toys, you will brush up against a Japanese brand of pottery with the same name. Weed out these distracting items by specifically excluding them from your search. For example "lego -(japan, japanese, pottery)."

Tip No. 4: Check out the seller before you buy. EBay works on a feedback system. The little number next to the seller's name represents the number of pleased customers minus the number of annoyed customers. So, don't be so easily impressed by just a big number. Be sure to click through to see if the seller has a history of complaints.

Tip No. 5: The easiest way to get ripped off is through excessive shipping and handling charges. If the price isn't posted, be sure to ask. If the seller only offers an extravagant shipping method, ask for something cheaper before you bid.

Once you have determined that you do want to buy something, you get to the hardest part of eBay: figuring out what your bid should be and sticking to it. The high bid prices on eBay are deceptive. You may see a new digital camera with a current bid of $6, but if the auction is going for days more, that price is meaningless.

So Tip No. 6 is to figure out what is a fair price by comparison shopping for similar items. This doesn't necessarily mean you have to get out of your chair. You can just look in online stores. More importantly, check other eBay auctions going on. Then--and this is the most important step--search for the item with the "Completed auctions" category. This will show what price the item has actually fetched and what your competition is. Checking the actual sales price will give you the most realistic price range.

EBay pros, however, rarely bid in flat dollar amounts. That's because there's a flaw in the eBay system. You would assume that if you entered $16 and if someone later bid $16.12 and the bid increment (minimum amount separating bids) is $1, you would win because $16.12 would be thrown out. However, under eBay's system of volleying bids back and forth, you could lose.

And that takes us to Tip No. 7: Bid in random odd cents. There is no conclusive evidence this will pay off; the result still depends on whether you bid the most, but you can outbid someone by just a penny.

Tip No. 8: Stick with your price. This will take all your strength. Everyone who's played on eBay for a while has had this experience:You find an item you covet, you bid a high price, it looks as if the item is yours, then someone outbids you. Suddenly, you are outraged that someone would "steal" your item from you. You retaliate by bidding higher and higher. If you win, you are almost inevitably stricken with buyer's remorse. If, however, someone pounces on your item in the last seconds of an auction, you also feel cheated.

The only way to avoid both scenarios is to bid the highest price you would want to pay.

"But if you have joined even one Internet auction, you probably know [rational bidding] is a fairy tale," wrote Stanford Professor Robert E. Hall in his book "Digital Dealing."

Swim with the 'sharks'

Buyers flock to eBay so they can be sharks and outbid someone at the last second, Hall explains. "They watch the last minute of an auction, hitting the refresh button every few seconds, poised to hit the submit button for their own bids a few seconds before the auction closes," Hall said. EBay encourages this behavior by its timed endings; other auctions do not close the auction for a set time after the last bid.

If you can't beat them, you can join them. Tip No. 9 is to become a little sneak yourself. The only way around these little snipes that come in and steal your item away is to do it, too. The easiest way to do that is to "watch" an item by hitting the binoculars icon. It allows you to stalk your prey silently. Then, in the last 15 seconds of an auction, you bid and hope your computer doesn't jam up.
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When news rocked Enron stock on Nov. 28, investors got to see first-hand the benefits of all-electronic trading. The Enron trading post at the New York Stock Exchange was overwhelmed with people dumping the stock. The specialist, the trader who manages all the trading in a particular stock, was so swamped that he stopped trading.

Investors who had access only to the NYSE had to sit tight. Meanwhile, investors with access to electronic trading networks, such as Chicago's Archipelago, kept trading. Over the next half-hour, the price on the electronic networks fell from $2.60 to $1.10 a share before the NYSE started trading again--at $1.10.

An Enron crisis, to be sure, does not happen every day. But there are plenty of little snags and snarls that translate to lost investor cash. A host of upstart electronic trading networks hope to reconstruct the stock market, smooth out those rough spots and make trading cheaper in the process.

At the head of that campaign is Archipelago, which gained approval from the Securities and Exchange Commission last October to become the country's newest stock exchange. Unlike conventional exchanges, Archipelago has no grand, stone edifice and, more importantly, no trading floor. Archipelago occupies only a few floors at 100 S. Wacker Dr., an undistinguished gray office tower in the South Loop. Archipelago, which processes 2 million trades a day, is by some measures the busiest exchange in Chicago and the biggest of the country's upstart trading platforms known as electronic communication networks (ECNs). As a group, these ECNs are giving the old stock markets a run for their money. By the fourth quarter, they were involved in nearly half of Nasdaq trades and about 6 percent in stock markets that have a trading floor, such as the NYSE. The work is revolutionary, but the office has all the excitement of an insurance company.

"The reason there's a lot of yelling and screaming in [traditional] trading rooms is inconsistency," insists Archipelago President Michael Cormack. "We have a lot of computer space that's really quiet that just hums away running trades through, consistently and without a lot of yelling."

When all the dust settles from the changing market structure, co-founder and CEO Jerry Putnam, 43, aims for the company to be one of three major national markets. "And we've done it from here," Putnam says. "We don't have to be the Second City when it comes to stock exchanges."

Putnam came up with the idea for Archipelago in 1997 when he was running a day trading company, Terra Nova. A new trading rule, aimed at getting brokers to handle their customer orders more openly, allowed for the creation of ECNs.

As an ECN, Archipelago already acted like an exchange: It was how buyers and sellers met. But Putnam wanted exchange status so Archipelago could share in trading tape revenue. To become an exchange, Archipelago had to get SEC clearance to become its own regulator. It sped the process up by merging with the Pacific Stock Exchange, which was already a regulator.

Archipelago probably helped itself by merging with the REDIbook ECN. Since Archipelago specializes in back-end computer equipment and REDI is known for a friendly front end, Bear, Sterns trading analyst Amy Butte, thinks it's a good match.

Plus, the deal allows Archipelago to keep a presence as a broker-dealer, just in case this whole stock exchange thing doesn't work out, Butte said. "Because this space is still like the Wild, Wild West," Butte said, "it creates a great hedge for the users and owners of the system."

Archipelago's original liability was a small customer base. So Archipelago designed a sophisticated computer system to link up with traders everywhere. The strategy was risky: it's like sending your business to your competitor.

To understand better what Archipelago does, picture it as a stereo store. Instead of just selling you its own goods, the clerks look through all the ads, find the best price for the stereo you want and get it for you. The Archipelago computer keeps track of how reliable and quick the various brokers and stock exchanges are so that if there's a tie in price, it knows which to choose.

Soon the disadvantage became an advantage: Customers knew they could get the best price anywhere by coming to Archipelago, so that's what they did. According to Butte, Archipelago enjoys the reputation of always trying to find what's known in the trade as "best execution," a complex mix of speed and price.

Archipelago now makes up about 30 percent of the ECN market, according to Greg Smith, trading analyst at J.P. Morgan. It currently matches 60 percent of its orders with its own customers, up from only 5 percent when it launched.

Competitors take notice

To fight back, traditional markets have spruced up their electronic networks, so that traders will not need ECNs as much. That could spell trouble for ECNs, especially those like Archipelago that are more known for routing orders well to many destinations rather than being the destination traders want to reach, Smith wrote in his latest report. "Over time we expect routing to become more of a commodity," he said.

The biggest difference that individual investors are likely to notice is during what is often the busiest and most treacherous part of the trading day: the open. Pros get into their office hours early to strategize how to play out the first few minutes of trading. Casual investors would be wise to steer clear of the rapid price swings. When individual investors decide to place an order after work at night, that order is usually executed at the open. They often get a bad price.

To change that situation Archipelago is planning to introduce a sort of giant matching system known as a "call market." Each morning, Archipelago will throw all buy and sell orders together in a sort of electronic hopper. The computer will figure out one price for everyone. The process aims to make trading fairer.

"The call auction is a natural way of strengthening the price discovery process at the open and making it more orderly," said Robert Schwartz, a professor of finance and economics at Baruch College and an expert on market structure.

The process is similar to how the specialist open stocks on the NYSE, but the non-computerized process takes so long that specialists often have to delay the opening of stock trading, Schwartz said.

The question for Archipelago will be whether they can attract enough orders to make the auction run smoothly, Schwartz said.

Individual investors, of course, cannot choose where their broker sends their orders. However, this fall the SEC just started demanding statistics from broker-dealers and trading venues on how fast they execute trades and whether they get a good deal, compared to the current market price.

Regulators hope this data will force exchanges to compete and brokers to use the fastest and most efficient trading systems. Even if Archipelago fails to make it as a major exchange, however, it has helped consumers by forcing the bigger markets to become leaner, faster and more efficient.
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People are willing to spend extra money to live near work or get to the beach, but will they pay more to live in a place with quick access to the Internet? The Internet building is betting they will.

The unassuming five-floor brick building in Manhattan's trendy East Village is the world's first residential building with high-speed direct Internet access in all its apartments, according to Gregory Salgado, sales director for Real Renters, a real estate firm that handles the building.

Tenants pay above-market rents--$1,500 to $1,750 for a one-bedroom apartment, plus fees for access to the building's T-1 cable that allows users to access the Internet up to 55 times faster than the fastest popular modem.

The main purpose of the high-powered cable is to circumvent the greatest source of frustration with the Internet, a long wait to download material.

In a neighborhood where sixth-floor walkups and bathrooms without sinks are not uncommon, Salgado hopes the Internet amenity will develop from merely an indulgence to a standard apartment building option.

"The main thing we have is the proximity of all these outrageously cool people," he said of the downtown neighborhood.

"Cool" is the word Salgado uses to describe his tenants--so far students, models, businessmen and computer workers who started moving into the building on April 1, 70 percent of whom opted for the Internet option. The first cyber-commune feels like a college dorm, with neighbors chatting in the lobby and planning a keg party to inaugurate their living experiment. But unlike a dormitory, a lot of conversation involves bandwidth, download speed and the building's nascent web-site.

Some tenants have a serious purpose for their heightened Internet access, but most admit they are just playing. Ed Figlar is a computer consultant for several large corporations whose mainframes have a software glitch that will make them inoperable at the stroke of the year 2000. With the T-1 cable, he can link clients' computers from home and read code faster. "I'm going to triple my business easily," he said.

For that difference in speed, tenants pay $85 to $115 a month to their Internet provider, Spark Internet, of which Salgado is the chief executive.

He has plans for another nine buildings in New York and predicts 20,000 to 25,000 New Yorkers will live in buildings with T-1 cables within three years.

Tenants in the building share the cable's bandwidth, so if all 28 apartments were on-line at once, an unlikely event Salgado says, the speed would be divided by 28, still about double the speed of a common 28.8 modem.

In San Francisco, landlord Arlan Hurwitz also offers free Internet access and on-site computer classes for any tenant who wants them. Now his building is full, there's a waiting list to get in, prospects appear more highly qualified with better jobs and higher incomes, and the property is worth half a million dollars more than it was a few months ago.

Hurwitz's 112-unit building--which he bought 26 years ago after starting his investment career with duplexes and four-plexes--is in a blue-collar area of Anaheim, Calif., which like much of Southern California has been mired in a flat rental market for most of the decade.

"I was having 10 units vacant each month," he said. A 10 to 15 percent vacancy was the norm for the last five years, and there was nothing that distinguished his building from many others in the area.

Hurwitz said the free Internet idea came while he was in the shower. He refined it with the help of a friend, Rainer Freytag, president of Adman Internet Marketing in Orange, and publicized the offer by erecting a red-and-white vinyl banner that cost $400.

That was just before Christmas. During January, normally a slow post-holiday period, Hurwitz said he got 57 inquiries from prospective tenants--and "48 of them came because of the sign," he added.

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Fellow city managers warned Larry Asaro before he came to Des Plaines four years ago that the city could be politically volatile.

And he knew that he would become the first city manager in a town that had debated for years whether to even have one.

What he didn't realize was that a few months after he started, the city would hold a referendum on whether to switch yet again, to the strong-mayor form of government, which would have eliminated his job.

"If I had known before I came up here, I probably would have had second thoughts," Asaro said.

The proposal for a strong mayor lost. But the candidate who had pushed it, Michael Albrecht, was elected mayor.

Now that Asaro has left his post to become county administrator for Peoria County, the debate continues on whether the city should be run by a home-grown, elected mayor or by a professionally trained manager.

Still, Asaro, former president of the Illinois City Managers Association, lists forging the role of manager as his biggest accomplishment in Des Plaines, where he came after being city manager in Galesburg.

"Every year about 52 towns across the country adopt the city manager. We don't lose places once they start - less than 10 (a year), usually highly political places," Asaro said.

Des Plaines would easily fit into that category. But in a March referendum, voters supported the position, and recent ordinances have strengthened it.

Convincing the city that Des Plaines could be run by a manager wasn't easy, Asaro said.

"We're not here to be political," he said. In a city of frequent political battles, Asaro wasn't one to join in.

Instead he usually sat by, taking notes and nodding to whatever presentation or confrontation he faced.

Asaro's agreeableness hasn't pleased everybody. Ald. Carmen Sarlo said he would like to see someone with more "spunk," a "take-charge guy," to replace Asaro.

And Albrecht said that while Asaro has done a good job of showing the city the way a city manager should work, he could have been more assertive.

But Asaro hasn't always done what the City Council wanted.

In a recent investigation of the award of a compost hauling contract, in which the city blamed Asaro and Public Works Director Jerome Matula, Asaro refused to give the council-recommended punishment to Matula. Both men maintained they had saved the city money in an emergency situation by bypassing city committees.

In his campaign to make the city more professional, Asaro laid out a uniform purchasing policy and a personnel policy, revised building codes and started downtown development. And the actual physical office of the city manager was finally completed last year.

Asaro, 47, grew up in south suburban Cook County and attended Lyons Township High School. He earned both his bachelor's and master's degrees from Northern Illinois University, and served in the Air Force during the Vietnam War. He is married and has two grown sons.

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Taking his leave: After four years of working with one of the most rancorous city councils in the area, Des Plaines City Manager Larry Austin Asaro was sent off in a friendly - even sentimental - fashion last Thursday.

About 50 staff members, politicians and City Council groupies said good-bye to Asaro at a cocktail party at Knicker's, one of the city's poshest restaurants and a definite cut above the sports bars where Asaro and council members usually went for beer after council meetings.

"We've had our ups and downs and run the gamut of every emotion associated with government," Mayor and emcee Michael Albrecht said of Asaro.

The city also presented Asaro with several gifts, some serious, but most memorably a bobbing bird to mimic Asaro's style of nodding at any speaker no matter how long, boring or adversarial.

Asaro, known for being diplomatic and apolitical, finally got to express some opinions about the council with his imaginary parting gifts: a long pole to Ald. Jim Healy to make it easier for him to sit on the fence on issues; The Male Self-Assertiveness Guide to Ald. Carmen Sarlo, one of the most boisterous aldermen, and a guide on how to win strong mayor referendums for Mayor Albrecht, whose involvement in a strong mayoral campaign would have eliminated Asaro's job six months after he took it.

Asaro, who will start June 1 as Peoria County Administrator, reviewed his several major accomplishments in the city and the problems now facing it and said, "Maybe now isn't a bad time to leave."

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Des Plaines Mayor Michael Albrecht has 10 days to decide whether he will veto a local sales tax of one-half of 1 percent.

The City Council passed the tax, earmarked for street and sewer repairs, by a vote of 5 to 3 Monday, one short of the number needed for a veto override. That would take 6 votes - two-thirds of the council.

Albrecht said he has not decided whether to impose a veto, which would be his first in three years in office, but will seriously consider the option.

If he does veto the tax, he said, he will leave the council enough time to try to override it before the June 1 state deadline for enacting home-rule sales taxes.

The next opportunity for the city to institute a sales tax would be in September 1993.

There are actually two ordinances involved in the tax: one to create the tax and one to designate the estimated $2.3 to $2.8 million collected annually to continue work on an estimated $30 million needed in sewer repairs and $40 million in planned street repairs and reconstruction.

Albrecht said his objection is to designating the money toward infrastructure repairs when the city may need it elsewhere. Des Plaines could face up to $1.7 million in added expenses and lost revenue next year because of possible state mandates, the loss of the income tax surcharge, and the city's decision to pay $480,000 annually to withdraw from the Solid Waste Agency of Northern Cook County.

Ald. Carl Haupt and Mary Childers said they voted against the tax because they believe they can find other ways to trim the budget to pay for the repairs.

Albrecht said the city will have to change its priorities in next year's budget, possibly reducing infrastructure repairs and turning to alternative sources of revenue such as user fees and sewer fees.

Aldermen who favor the tax, however, said they believe the city will only create more costs by putting off needed repairs.

"The infrastructure cannot be denied," Ald. Nick Chiropolos said.

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A proposed half percent city sales tax is getting strong support from some Des Plaines aldermen, but Mayor Michael Albrecht isn't yet buying into the idea.

Albrecht says he may veto the tax if it gets final approval from the City Council. The mayor is not necessarily against using such a tax to raise city revenue but does question whether the money should be earmarked for street and sewer repairs, as proposed.

The city should keep its options open because of possible financial drains such as loss of the income-tax surcharge, state mandates, a tax cap and the recession, he said.

In addition, he said, the city is considering plans to build a $12 million library and would need revenue for that too.

"We are going to have to do some serious prioritizing," Albrecht said.

The tax, which is expected to generate between $2.3 million and $2.8 million for the city each year, won preliminary City Council approval at a special meeting Tuesday night. The vote was 5-1 to approve the tax, with two aldermen absent.

A second reading of the ordinance will be up for council approval Monday.

The council's Finance Committee last week approved the tax, which would not apply to food, drugs or automobiles.

Ald. Bill Schneck said he called the special meeting Tuesday to prevent someone from deferring the ordinance. In order to go into effect this year, the ordinance must be approved by June 1.

City attorney Judy Kolman said the council would need a two-thirds majority, or six votes, to override the mayor's veto.

Ald. Carmen Sarlo said he favors the sales tax because it will take some of the burden off increasing property taxes. "I hate to see us go out for bonds without any resources to pay for that except John Q. Property owner," Sarlo said.

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Saying that any sexual contact with clients was accidental, the owner of a Mt. Prospect massage parlor has gone to court to stay in business.

Oehui Kim, owner of the Sports Health Spa, at 1657 Busse Rd., has filed an appeal in the Chancery Division of Cook County Circuit Court, seeking to regain her business license.

The village revoked the license in March after an undercover Cook County deputy sheriff testified that after paying for a full-body massage, everything got massaged.

The massage parlor will remain open until the case is settled, Village Manager John Fulton Dixon said.

Ben Goldwater, Kim's attorney, said that any genital touching was accidental, and that since the money exchanged was for the massage, and not for any sexual act, no prostitution took place.

"There was no evidence of any sort of prostitution," Goldwater said. "The event that supposedly took place contained a moment of 'touching.' . . . That doesn't sound to me like an attempt at sexual gratification."

Goldwater added that the Cook County state's attorney had decided not to press a criminal prostitution case against the parlor.

But, "whether or not there was prostitution is not the issue," Dixon said. "My concern is that it was an immoral act."

Dixon said the undercover officer was sent in after police received three complaints of similar sexual massages at the business, which opened last summer.

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A little-noticed glass case in the lobby of Des Plaines City Hall has given some officials a case of discomfort in today's world of political correctness.

The exhibit from the Des Plaines American Legion and its Auxiliary Post contains a poem entitled "You Remember the Real America." Written about 20 years ago, it now drips with irony given the recent turmoil in Los Angeles following the verdict in the case involving four police officers in the beating of Rodney King:

"When riots were unthinkable," it begins. "When you left front doors open./When socialism was a dirty word./When ghettos were neighborhoods."

Published by the conservative Americanism Educational League in Orange County, Calif., the poem harkened back to "When a boy was a boy, and dressed like one./When a girl was a girl, and dressed like one."

It also lamented the loss of the days "when you weren't made to feel guilty for enjoying dialect comedy."

Such musings had never prompted "any adverse feedback," Edward Rankin, the league's executive director, said Monday. None, that is, until now.

After seeing the poem, some aldermen and city officials blasted it as decidedly inappropriate for display in City Hall.

Ald. Mary Childers called the tract "hateful" and questioned how the city chooses what it will allow in its display case.

Added Ald. Jim Healy: "I think it's racist, sexist, anti-Semitic. You name it."

Healy, saying he doesn't want the city to get involved in censorship, said that at the next council meeting he will ask that the display case only be used by city departments.

Rankin explained that the reference to boys and girls was written as part of a "nostalgia piece" to decry "the unisex trend as much as anything else . . . the long hairdos and what-not" of the late 1960s.

As for "dialect comedy," he said, "Many people, whether Polish or Jewish or what-not, thought dialect comedy was funny. It certainly wasn't meant to demean anybody.

"Then everbody got supersensitive."

The woman who installed the display, which centers on the Legion's Poppy Day, said she didn't find the verse offensive.

"I just thought it was a nice poem," said Irene Sauer, Poppy Day chairman for American Legion Auxiliary Post 36.

In any case, this wasn't the first time the display case prompted a quest for ideological neutrality.

The city recently posted a disclaimer in the case after some officials voiced concerns over a March display from the National Organization for Women that included a Michael Dukakis button from the '88 presidential campaign. It also featured buttons promoting gay and lesbian rights.

The NOW display, City Manager Larry Asaro contended, wasn't "exactly mainstream."

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Half-a-dozen Des Plaines residents say they are considering running next spring for the seat of Mayor Michael Albrecht, in the wake of his defeated bid to make the position full-time.

But one of them, former Mayor Jack Seitz, said he may instead apply to replace City Manager Larry Asaro, who is leaving at the end of the month to become supervisor of Peoria County.

Seitz, 61, was an alderman from 1967 to 1981 and mayor from 1981 until he lost to Albrecht in 1989. The city manager's position was created in 1988 under his administration, and he said he thinks he can fill the position professionally.

"If I were to be offered and accept the position, I don't think I'd get involved in the politics," said Seitz, a management teacher at Oakton Community College who will be retiring this summer.

Although having been mayor doesn't disqualify Seitz, it is sure to become an issue in a city that has argued over the roles of the manager and the mayor for about 20 years.

Though Seitz said he has put a mayoral campaign on the back burner, at least five other people are considering running: Albrecht, three of his four foes on the City Council and a leader of a citizens group.

Although Albrecht, 42, has not announced whether he will run for a second term, it is widely assumed he will.

He said recently that he is still undecided about the election, but has become more cautious because of the referendum in which voters refused to make the mayor's position full-time.

Meanwhile, aldermen and the citizens group that waged the campaign to put the question to voters have gained confidence.

The prospective candidates agree that if their goal is to take Albrecht out of power, there should only be one other candidate to oppose him. But they don't agree on how that one person should be selected.

Citizens for Responsible Government, which planned the referendum drive, will not become a political campaign organization or make any endorsements, said its chairman, Jackie Somerville.

But many members of the group are supporting Ted Sherwood because he has no political baggage and has a strong network in the business community, Somerville said.

Sherwood, 70, a semi-retired businessman, now is on the economic development commission.

Unlike most of the the people who oppose Albrecht, Sherwood agrees with the mayor that knocking down the Behrel Deck parking garage is necessary for downtown development.

But some in the community say that Citizens for Responsible Government isn't really staying out of politics. "If a high-ranking member of their group is running for mayor, I don't see how they can say they're not involved," said Ald. Mary Childers.

Childers, 42, one of Albrecht's most constant critics and who led an investigation into controversial compost hauling contracts, has not yet decided whether to run.

And Ald. Carl Haupt, who has led periodic charges against the city's lawyers, said he is considering the job and has already gotten support from his family and from work and church to run.

Ald. Carmen Sarlo, another possible candidate, said Sherwood's candidacy would not necessarily deter him from running.

"I say, 'Never say never,' " said Sarlo in regards to his possible candidacy.

Sarlo has been an aldermen for all but four years since 1973.

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Joining a growing number of suburbs that are turning to the sales tax as a way to increase municipal revenues, Des Plaines is considering a local tax of one-half-cent per dollar.

Revenue generated by such a tax, recommended this week by the City Council's Finance Committee, would pay for a variety of capital improvement projects, including street and sewer-system repairs. The tax would raise $2.3 million to $2.8 million a year, depending on the economy, officials estimate.

Members of the City Council are expected to vote on tax on May 18. The Finance Committee's recommendation came two days after the Cook County Board approved the county's first sales tax, a controversial three-quarter-cent fee that applies to all items except food, medicine and automobiles.

Both bodies' actions mirror the growing trend by a number north and northwest suburbs of turning to sales taxes as an alternative revenue source in response to the region's economy taking a bite out of sales tax revenues and strong opposition to higher property taxes.

The proposed Des Plaines tax would take effect in September and raise the total sales tax in the city to 8.25 percent. Currently, the sales tax rate is 7 percent, of which the city receives one-seventh back from the state.

Money generated by the tax would be used to fund repairs on streets, sewers, sidewalks and possibly the Behrel Parking Deck that many say divides the downtown.

City officials said they favor a higher sales tax for a number of reasons.

"What we're thinking of doing is making it a little fairer," said Ald. Carmen Sarlo, referring to the alternative of raising property taxes. "Maybe it isn't the fairest thing in the world, but at least it's not just hitting the property owner."

Ald. Bill Schneck said he favored the plan because Des Plaines residents already pay home-rule sales taxes when they shop in many neighboring communities.

The city would join suburbs such as Skokie, Niles, Morton Grove, Buffalo Grove, Arlington Heights, Mt. Prospect, Rolling Meadows and Schaumburg that have increased or adopted a local sales tax within the last two years.

Though there is no limit on the amount of sales tax a home-rule municipality, such as Des Plaines, can levy, communities are prohibited from increasing the figure more than 1 percent annually, Des Plaines Comptroller Greg Peters said.

Approximately $2 million would be divided evenly between projects that would renovate streets and sewers, according to officials.

Des Plaines started a 20-year, $53 million program in 1986 to overhaul its sewer system, including separating sanitary and storm sewers in some parts of the city, said city engineer Tom Oakley.

About 20 percent, or 40 miles, of the city's streets need resurfacing or reconstruction, Oakley estimated.

In addition, Des Plaines will need $5 million in order to catch up with needed street repairs over the next five years, he said.

The tax would also be used to repair curbs and, in conjunction with a program that splits the cost with residents, improve sidewalks.

Sarlo said some of the money should be used to repair the Behrel Parking Deck, which the city has not been improving because it originally expected to demolish the unpopular structure, but later scrapped those plans.

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Des Plaines officials are considering a new commuter railroad station for Metra's planned Wisconsin Central line.

The proposed route has taken a turn that diverts it from the existing station in downtown Des Plaines, so the city would need a new depot if trains are to stop there.

And to increase Des Plaines' chances of being a stop on the line, City Manager Larry Asaro is urging the city to join in the planning process for the line by joining the transportation unit of the Northwest Municipal Conference - which the City Council rejected last year.

When planning began on the commuter line in 1986, the train was to start in Antioch on the Wisconsin border and turn at the Chicago and North Western tracks in Des Plaines, stopping at the station there before heading into downtown Chicago.

But the plans have now shifted. The new proposed route passes the North Western tracks, connects to O'Hare and hooks up with the Metra Milwaukee District West line in Franklin Park.

Des Plaines aldermen rejected a proposal to join the transportation unit a year ago because of cost. The same $5,000 annual cost may be an issue again.

The startup date for the train remains uncertain because the transit agency has not yet lined up financing for the commuter line, said Metra spokesman Marla Karlin.

Municipalities are expected to pay for the construction of stations and parking lots. But Asaro said he does not know how much that could cost the city, in part because the size of the parking lot would be determined by a ridership survey.

In order to cut down on expenditures, Des Plaines is considering sharing the cost of a station with Prospect Heights, Asaro said. The city also will consider placing a station at Central Road, near Maryville Academy; at the Pace garage on Northwest Highway; at Howard Street at South Park; or near Pratt Avenue close to Rosemont and the Horizon.

Eleven stations are already proposed in other communities, including Prospect Heights, Wheeling and Buffalo Grove.

Another cost of the route change for Des Plaines will be the loss of repairs on the S-curve of Northwest Highway that goes under the tracks. Asaro said one of the reasons Metra decided not to take a turn at the bridge was a potential $5 million cost to redo the underpass.

Mayor Michael Albrecht said the wooden train bridge that straddles the curve was built as a temporary structure about 50 years ago.

The curve used to cause one or two fatal accidents a year, the former police officer said, but a concrete divider has stopped that.

According to police, in 1991 there were nine accidents that caused injury and 23 that caused property damage at the curve.

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After Des Plaines voters overwhelmingly rejected a proposal to make the mayor's job full time, some people expected Citizens for Responsible Government, the group formed to fight the plan, to fade out of the picture.

Even its chairman, Jackie Somerville, said she had envisioned that the group would re-form only when issues heated up in City Hall. But interest from the approximately 500 people who contributed to the referendum campaign did not die out after the election.

"I thought that might be the ending, but it isn't. I see people in the store . . . and they say 'please don't stop,' " Somerville said.

In the next few weeks, Somerville said, the group will be meeting and deciding which direction to take and how to tackle city issues.

One thing that is now certain: The group will remain a presence. It aims to have at least two members at every meeting of City Council committees, where nuts-and-bolts decisions are made.

"Committee meetings are important because there you can see what's going on . . . before it gets to City Council," Somerville said.

The group is not without critics. Mayor Michael Albrecht, the proponent of the full-time plan, contends that all the group does is criticize the way the city is run, without offering positive solutions.

At a recent City Council meeting, Somerville laid out some of the group's goals.

Since then, the council followed her advice by changing some wording to give more strength to the city manager ordinance and opening up the city's freedom of information policy.

The council discussed, but did not pass, a measure to fire two of the city's lawyers, who opponents had suggested give bad advice in favor of Albrecht.

Somerville said she considers the issue dead for now, but the group will continue to watch the lawyers' performance.

The group has already started researching the city manager form of government in case Albrecht follows through on his suggestion to put the issue of the balance of power between mayor and manager to a referendum, she said.

Ald. Mary Childers, who is connected to the group though she is not a member, said she sees the organization changing from an ad hoc group to a watchdog.

But one thing Somerville doesn't want is the group becoming a campaign organization for next spring's election.

Members can support whom they choose, but the group will make no endorsement, Somerville said.

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While men in tuxedos and women in gowns and furs listened to Mike Carney and his orchestra at the Ritz-Carlton last weekend, the reason they were there was not far out of mind.

That's because some of the 500 people attending Clearbrook Center's annual benefit ball have children of their own who attend the center or are friends of those who do, according to co-chairs Mary Ann MacLean and Jan Lundal.

The not-for-profit center based in Rolling Meadows started as a school in 1955 and has grown to serve the needs of about 600 children and adults with developmental disabilities in a variety of programs.

"We help the clients to reach the highest level of their own independence. The highest functioning people end up with jobs and a paycheck. The lowest functioning end up as kind as possible," said A.J. Gallagher Jr. of Palatine, vice chairman for membership on the board of directors.

Despite the recession's squeeze on many charities, the ball passed it's goal of raising $300,000 for Clearbrook's clinic, MacLean said.

Even those without children at the center were reminded of the work they were contributing to. Clearbrook clients who participate in the center's workshop, where they earn a paycheck as well as self-esteem, put together complimentary baskets for the guests and, before dinner, guests watched a video of activities in the workshop.

"One of the things we want people to leave here with is the idea that these people can work," MacLean said.

Not only did guests leave with a greater understanding of the center, but some left with raffle prizes such as trips to London, Australia or the 1993 Superbowl at Los Angeles. Others got a chance to meet with prominent local businessmen, including Gordon Segal of Crate and Barrel, which gives the workshop packing and assembly business, and Howard Dean of Dean Foods. Thanks to Nancy McCaskey, who co-chaired the event last year, two Chicago Bears figures, husband Mike McCaskey and Mike Ditka, in tux with polka-dotted cummerbund and bow-tie, attended the event and drew the raffle tickets.

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In the wake of a seven-month investigation into an allegedly mishandled compost-hauling contract, Des Plaines has established a new policy for hiring contractors and buying materials.

A joint meeting of the City Council's Finance and Engineering Committees decided Monday to approve a plan designed by city manager Larry Asaro that designates one person as the city's purchasing agent.

While the city will not be able to hire an employee for those duties until the 1993 budget is worked out, a Finance Department staff worker will start doing the job soon, Asaro said.

"We don't have that extra person right now. It's a full-time position. . . . It needs to be someone who knows how to buy," Ald. Bill Schneck said.

The purchasing agent would work under the city manager and would consult the council if deviations in the policy are needed.

According to Ald. Mary Childers, the position would simply take responsibilities away from several people in each of the city's departments who are in charge of hiring contractors and buying supplies.

Aldermen hope the agent will not only make purchasing uniform throughout the city, but will be able to buy in bulk and find contractors with good prices.

In addition, the city will no longer require bid bonds for jobs under $15,000 in an effort to attract smaller contractors. For those, the city will simply withhold total payment until after the job is completed satisfactorily.

But, abiding by the results of a March non-binding referendum, the council kept a requirement that contracts for more than $5,000 go through a formal bidding process.

The way the city handles bids and awards contracts came under scrutiny last August when Public Works Director Jerome Matula awarded an $18,200 compost hauling contract to a firm owned by Robert Albrecht, brother of Mayor Michael Albrecht.

Matula had Asaro's approval, but did not consult the Public Works Committee, as required. Both Matula and Asaro contended they awarded the contract on an emergency basis and actually saved the city money.

After a lengthy investigation, the council decided to recommend that Asaro suspend Matula for one month without pay and not give Asaro a raise this year. Asaro, who is leaving for another job downstate, did not enact the punishment against Matula.

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It was Christmas in April Saturday in the northwest suburbs - and not just because the weather made it seem more like December.

A group of about 100 volunteers, mainly from the real estate and building trades, got together to bring to the suburbs the nationwide Christmas in April program, which makes home repairs for elderly and disabled people.

The repair sessions were held Saturday in 165 cities, sponsored locally by the Northwest Suburban Association of Realtors.

This year the volunteers worked on two houses, one in Inverness and one in Des Plaines.

With 55 organizations and businesses donating goods and cash, the crews were well-equipped with about $4,500 for each house, spokesman Dan Grant said.

Workers, who in normal life were everything from bankers to carpenters to students, gathered for a doughnut breakfast at 7 a.m.. They got awkward white paper jumpsuits to protect their clothes and heard some final instructions before they loaded two buses, one to Des Plaines, one to Inverness. Some didn't finish up until 12 hours later.

There were still a few odd jobs left, but for the most part the one-day elves accomplished their holiday-style magic.

Volunteers felt "great, a real sense of satisfaction, to be able to see the before and after, what a difference," said chairman Bob Baldwin, who worked as captain at the Inverness site.

The house's owner, a woman in her 70s who asked not to be identified, said she was impressed with all the work, including replacing the kitchen sink.

"They were doing quite a bit. I think they were very conscientious people, especially the ladies . . . very, very excellent," she said.

The owner of the Des Plaines house, an 82-year-old man, was not there to see the work. He had had a stroke the day before and was in the hospital.

Workers went ahead with all the work they promised, replacing a leaky picture window, gutters, carpets, and the refrigerator and toilet as well as painting the entire inside and outside and doing some landscaping.

In addition to all the planned repairs, workers kept consulting with house inspector and Des Plaines team captain Bruce Fisher to do extras, such as making the mailbox less wobbly or replacing a light fixture.

The Des Plaines crew had the added bonus of six volunteers from vocational programs at Maryville Academy, which houses abused and neglected children and teens.

In the coming years, the group plans to set up a committee of religious leaders of different faiths to select people who need help in each of the 15 communities it serves, from Niles and Park Ridge out to Wheeling and Schaumburg.

"I volunteered to be with people and to help other people that need help," said Jason Kwiotek of Maryville.

All the commotion and scores of workers aroused the curiosity of neighbors. A man in a Santa Claus suit passing out lunches created even more puzzlement.

"Most of the neighbors don't know what's going on and I'm sure they're dying" of curiosity, said Bob Schmadebeck, who lives near the Des Plaines home.

But the improvement is great for the image of the neighborhood, he said.

"The inside alone would have taken a week. It won't look like the same old place when they're done with it," Schmadebeck said.

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The Des Plaines Public Library decided last week it would not remove the book "Slim Down Camp" from its children's section, despite the objections of some parents who say it contains "profanity and immoral situations." But officials said they will seriously investigate creating a special young adults section for similar books.

Ann Piscitello, who collected 50 signatures on a petition saying the book about a 14-year-old's adventures at a weight reduction camp contained "repeated profanity and immoral situations," said she thought her group received a fair hearing from the board and would not take the next step of taking the complaint to court.

The board held a public hearing earlier this month on the Stephen Manes book, which contains references to masturbation and strip poker.

Petitioners said they wanted a special teen section so such books could be placed out of the easy reach of younger children who might be using the section designated for 4th through 8th graders. The library said taking it out of the section of its intended readers would be tantamount to censorship.

Citing surveys from the National Center for Educational Statistics, Kathleen Ciampi said the library needs a young adult section as a transition for the one of four library patrons who fall into the young adult category defined as 12 to 18 years old. Nationwide, 84 percent of public libraries have young adult sections, she said.

"We asked the library to establish a young adult's section and we think it would be a positive addition to our community . . . a way they can update the library and help us, too," Piscitello said.

The board agreed to have a staff member investigate the possibility of such a section, what kind of books it would contain and what ages it would serve, Library Administrator Bernard Oppenneer said.

No timetable has been set for the possible new section.

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Mayor Michael Albrecht, rebuffed by Des Plaines voters in an attempt to make his job full-time, has taken a job as a Cook County Forest Preserve police officer. But he says that doesn't mean he's giving up his strong role in the city.

"I'm the mayor for another year, and I'm going to do the best job I can," Albrecht said.

Taking on a full-time $30,000 a year job at the Busse Woods Forest Preserve near Elk Grove Village will mean he has less time to spend in City Hall, Albrecht said. But he still plans to be in the office on Mondays and Tuesdays.

Albrecht said he will still be available for residents "unless I'm out arresting a deer or something."

Albrecht said he has a new plan to organize city projects into teams, such as a downtown development team, to handle specific issues. The teams, each headed by a city employee, would speed up work and increase accountability, he said.

He said he will continue to push for annexation, growth and downtown development, with the demolition of the infamous Behrel Parking Plaza as a hope and a comprehensive downtown plan as an immediate priority.

"The '80s just passed us by. The rest of the area was developing and Des Plaines got nothing," Albrecht said.

Albrecht said he had been looking for a new job for months and the new job was not a direct result of the sound defeat on March 17 of a referendum proposal for a full-time mayor.

The part-time mayor position has an annual salary of $6,000; if the position had been changed to full-time, the salary would have grown to $55,000.

Some aldermen and city employees said Albrecht became less assertive after the referendum proposal was defeated, and the mayor has said he would be leaving more decisions to the city manager.

"I think his initial reaction was understandable. I think he's back on track," planning director Lou Pagones said.

Opponents of the mayor fear that lying low may have been a tactic while Albrecht made grander plans.

Albrecht said his standing campaign organization, known formally as Citizens for Albrecht and locally as "The A-Team," will also examine its image problems.

The mayor said opponents "say we've got an evil plan to run the city," Albrecht said.

The next mayoral election will be in the spring of 1993. Albrecht and several of his foes on City Council and in the community are considered likely candidates for the post, though no one has officially announced.

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It is now just as illegal to sell non-alcoholic beer and wine to minors in Mt. Prospect as it is to sell them the hard stuff.

The village's new ordinance is one of a growing number of such laws being passed around the country on the theory that the ersatz beers will encourage teenagers to get in the habit of drinking them and graduate to alcoholic brews.

Mayor Gerald Farley urged passage of the law Tuesday "in order to be sensitive to young people in the community who are in the stage of their lives when they are forming habits and developing social skills."

Village Manager John Fulton Dixon said the ordinance was prompted by the small amount of alcohol that even "non-alcoholic" beers contain and on a determination not to give the impression that drinking beer and wine is condoned.

According to the Bureau of Alcohol, Tobacco and Firearms, beers may be labeled "low alcohol" if they have less than 2.5 percent alcohol, "non-alcoholic" if they have less than one half of one percent alcohol and "alcohol-free" if indeed they are. Beer normally is 4 to 5 percent alcohol.

The village law had the support of Police Chief Ronald Pavlock and the Alliance Against Intoxicated Motorists, which stated in a letter to the board that fatal car crashes involving drunken minors usually involve beer.

Trustee George Clowes said he objects to the reactionary tone of the law and does not think police should be spending their time monitoring the sale of non-alcoholic beverages.

"I just don't think this is a public safety issue," Clowes said. "When teenagers get to be 18, they're old enough to vote . . . they're old enough to drive a car 65 m.p.h. It's silly to say they're not old enough to drink non-alcoholic beverages."

Makers of the non-alcoholic beers, while saying the beverages are marketed toward and consumed by an adult market, contend that laws such as Mt. Prospect's solve no problem and may create one by making non-alcoholic beers seem forbidden and therefore desirable to teenagers.

Village trustees modified the ordinance to ensure that it applied only to look-alike beverages and not to the myriad other grocery products that also contain alcohol, such as vanilla extract and soy sauce.

Critics predict that if Mt. Prospect teens really want to drink the non-alcoholic beers, they could just cross the border into Arlington Heights or other suburbs.

Teenagers who do learn to like the taste of non-alcoholic beer could later find that they are part of the 10 percent of the population naturally predisposed to alcoholism, argues Paul Teodo, vice-president of the alcoholism treatment center of Central Du Page Hospital.

And recovering alcoholics of any age should stay clear of the "near" beers, he said.

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It's touted as a healthy alternative to drinking beer. But lately, some authorities have charged that non-alcohol beer is more dangerous to teens than its scant alcohol content suggests.

The National Council on Alcoholism and Drug Dependency calls the non-alcohol brew, often packaged and labeled to look like beer, a "training beverage."

Now legislators around the country are beginning to pass laws that would put the same age requirements on buying the look-alike beverages as for the real stuff.

Mt. Prospect trustees are to vote Tuesday on an ordinance that would declare the non-alcoholic beverages legally alcoholic, meaning you'd need a license to sell them and have to be 21 to buy or drink them.

"I think it's a pathway for many young people to start their experience with alcohol," Mayor Gerald Farley said.

In Plainfield School District 202, school officials this year decided to ban all look-alike drugs from school property, including non-alcoholic beer as well as a mint version of chewing tobacco. They reasoned that lunchroom supervisors and hall monitors don't have time to waste trying to tell the difference between a Sharp's - a non-alcoholic brew - and a Harp - real beer.

The Mt. Prospect ordinance would apply to non-alcoholic wines as well. But because officials believe teenagers are more prone to drink non-alcoholic beer, that's the beverage that gets the attention.

Rep. Manny Hoffman (R-Homewood) has proposed a state law that would prohibit the sale of these beverages to minors. The bill failed last year, but Hoffman, in his last term, is trying again this session.

The legislation is based on both the small percentage of alcohol that the "non-alcoholic" drinks actually do contain, and the message they may send teenagers that drinking is socially desirable.

Regular beer is 4 to 5 percent alcohol by volume. But by using different brewing methods, it is possible to produce non-alcohol beer, defined by the federal government as containing less than 1/2 of one percent alcohol; alcohol-free beer, which is just what is says; or low-alcohol beer, which has less than 2.5 percent alcohol.

Brewers deny that their non-alcohol product is likely to lead teenagers down the road to drinking. The brewers say they market the product to legal, adult drinkers as a lighter alternative to beer, but they oppose laws to keep teenagers from buying it.

"They may backfire because they create a forbidden-fruit aura," said Richard J. Klemp, director of government affairs for Miller Brewing Co.

Klemp said he expects Hoffman's bill,