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Yes, I would definitely steer away from someone who said they could *themselves* do both. Best result which web development companies have is both designers and developers. Design comes first (and should follow analysis of business goals), and then this design is implemented by the developer.
Some designers can do simple implementation of their designs, and some developers do ok design, but in essence these are almost opposite skill sets.
I work with many independent designers and then have my developer implement them to be living, breathing websites.
Having said all of this – in layperson’s language, many people use web developer and web designer interchangeably.
Whatever you do – it should start with an understanding and alignment of your business plan and goals – as the key in the end is not how good it looks, but what your site visitors do when they first get to your site. You need a clear and obviously stated ‘conversion’ strategy. eg. I want to get people to sign up to my newsletter, or I want people to buy my product, or to call me. This is where it all needs to begin.
Good luck.