GOVERNMENT OF THE DISTRICT OF
Office of the Chief Financial Officer
Natwar M. Gandhi, Chief Financial Officer
TO: The Honorable Anthony A. Williams, Mayor, District of Columbia
The Honorable Linda W. Cropp, Chairman, Council of the District of Columbia
Dr. Alice M. Rivlin, Chairman, District of Columbia Financial Responsibility and
Management Assistance Authority
Julius W. Hobson, Jr., Chairman, Public Benefit Corporation
FROM: Natwar M. Gandhi, Chief Financial Officer
DATE: November 14, 2000
RE: Urgent Need for Action in Regard to PBC
At our November 3, 2000 retreat I expressed my concern that unless decisive action is
taken soon, the Public Benefit Corporation (PBC) will run out of cash. It is with the
greatest urgency that I write to you now to reiterate that concern about the need for
At its current rate of spending. PBC will exhaust its $45.3 million FY 2001 subsidy by
the middle of March 2041. If money is set aside to maintain PBC's clinics throughout the
fiscal year, D.C. General Hospital will be forced to close even sooner, perhaps by as
early as two months from today. In either case. I will be unable to redirect funds from
any source to continue PBC operations unless a plan to restructure PBC is approved by
Because as many as 60 days would be needed to make alternative care arrangements for
patients who would be affected if the hospital shuts its doors, a decision on how to
proceed must be made immediately. Unfortunately. our options are limited. Fiscal
constraints imposed by Congress are complicated by the need to act during the
post-election recess period.
Under the FY 2001 appropriations act, Congress imposed conditions on any
inter-appropriation transfer of funds to PBC. These conditions require the District to
have an agreed upon restructuring plan for PBC that eliminates, at a minimum, 500 full
time equivalent positions at PBC; does not contemplate any additional expenditure of
federal funds; and provides Congress with 10 days prior notice of any inter-appropriation
transfer of funds.
No such plan has yet been formulated. Congress is expected to be in recess until
December 5, 2000. It is anticipated that Congress will adjourn again shortly thereafter
until late January or early February 2001, past the point at which PBC's cash would be
exhausted. It is therefore imperative that any plan to restructure PBC be in place
for Congress to consider upon its return from recess on December 5.
I also believe it would be prudent to formulate a contingency plan for closure of D.C.
General Hospital in the event a plan to restructure PBC cannot be agreed upon in a timely
In conclusion, decisive action must be taken now to ensure adequate, continued delivery
of public health care services in the District.