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MEMORANDUM
TO: The Honorable Anthony A. Williams, Mayor of the District of
Columbia
The Honorable Linda W. Cropp, Chairman, Council of the District of
Columbia
FROM: Natwar M. Gandhi, Chief Financial Officer
DATE: July 24, 2002
RE: Plans for Closing $75 Million Budget Gap
Summary
Following a very productive process in which savings targets were set
and agency directors retained maximum flexibility in identifying spending
cuts, final decisions were made on July 22, 2002, for closing the $75
million budget gap for the remainder of FY 2002.
The $75 million gap will be closed with:
- $47 million from the conversion of "O"-type revenues,
collected but not spent in FY 2002, into unrestricted local funds;
- $10 million from net reimbursements to the District from the U.S.
Marshals Service to cover the Department of Corrections’ (DOC) cost
for housing federal prisoners; and
- $18 million from savings in local funds spending. We continue to
believe that neither furloughs nor reductions-in-force will be
necessary.
Transfer of "O" type revenue to local funds will require
Council approval (passive) and will be submitted to the Council
accordingly.
We will report weekly on the status of the plan, and an updated revenue
estimate will be available in mid August. If it appears that the gap might
not be closed, we will take additional steps as necessary. It is
imperative that the District’s continued financial viability be ensured
by a balanced budget for FY 2002, and these savings will help us as we
plan for probable reductions in the FY 2003 budget.
Background
In my July 2, 2002, memorandum, I presented these same three sources of
funds for closing the entire $75 million budget gap. On July 9, 2002, City
Administrator Koskinen issued a memorandum to agency
directors outlining a process for achieving the targets and making final
decisions. Agency directors and their staffs worked hard to identify the
spending reductions they could make to achieve balance by the end of FY
2002. The deadline was met, and final decisions were made on July 22,
2002. The details were presented to agencies at the Cabinet meeting on
July 23, 2002.
Conversion of "O"-Type Revenues
"O"-type revenues are charges and fees that are dedicated to
and collected and spent by the collecting agency. The Council approved
legislation on July 2, 2002, to convert FY 2002 collections of
"O"-type revenues to local funds.
The $47 million of "O"-type revenue available for closing the
gap is composed of two major components – $25 million in proceeds from
the sale of the Department of Employment Services (DOES) building to the
Freedom Forum in December 2000 and $22 million from a variety of other
accounts (see Attachment 1). In place of the $25 million, planned capital
funds will be used to construct the new DOES headquarters.
Department of Corrections/U.S. Marshals Service Reimbursement
In addition to the $47 million above, $10 million is available from net
reimbursements to the District from the U.S. Marshals Service to cover the
DOC’s cost for housing federal prisoners. The transfer of felons
sentenced pursuant to the D.C. code from the custody of the District to
the federal Bureau of Prisons following the closing of Lorton Correction
Complex is a provision of the National Capital Revitalization and
Self-Improvement Act of 1997.
Reduced Local Funds Spending
The remaining $18 million in savings to offset the revenue shortfall
will come from reduced local funds spending (see Attachment 2).
As I stated in my June 27, 2002 memorandum, these will be difficult
budget measures for the remaining months of FY 2002, but we expect the gap
can be handled without harsher measures such as furlough days and
reductions-in-force. Agency directors must adhere strictly to the plan to
ensure the District’s overall financial viability. We will monitor
progress weekly and will recommend additional measures as deemed
necessary.
To ensure the continued financial viability of the District, we expect
that the District will need to make revisions to the FY 2003 budget plan.
We will know the magnitude of the revisions when the updated revenue
estimates become available in mid-August. Therefore, agencies should be
cautious when making spending commitments over the next two months.
attachment(s)
cc: Members of the Council of the District of Columbia
John A. Koskinen, Deputy Mayor/City Administrator
Julia Friedman, Deputy Chief Financial Officer, Office of Research and
Analysis
Bert Molina, Deputy Chief Financial Officer, Office of Budget and Planning
Artie Blitzstein, Budget Director, Council of the District of Columbia
Agency CFO’s
Back to top of page
ATTACHMENT 1
FISCAL YEAR 2002
PROJECTION OF AVAILABLE O-TYPE COLLECTIONS
Agency |
(1)
Original
Estimate |
(2)
Adjusted
Estimate
Coll.-Exp.
Q1-Q3 |
(3)
Adjusted
Estimate
Coll.-Exp.
Q4 |
(4)
Updated
General Fund
Transfer |
Office of Property Management |
1,600,601 |
1,075,235 |
(575,235) |
500,000 |
Office of Finance and Resource Management |
227,133 |
0 |
0 |
0 |
Office of the Chief Financial Officer |
237,805 |
(3,673,443) |
3,911,248 |
237,805 |
D.C. Office of the Secretary |
511,053 |
0 |
0 |
0 |
D.C. Office of Personnel |
611,293 |
9,757 |
0 |
9,757 |
Commission on the Arts and Humanities |
141,433 |
0 |
0 |
0 |
Office of the Corporation Counsel |
717,292 |
0 |
0 |
0 |
District of Columbia Public Library |
6,805 |
0 |
0 |
0 |
Dept. of Consumer and Reg. Affairs |
4,184,801 |
4,354,182 |
181,695 |
4,535,877 |
Dept. of Housing and Com. Development |
5,861,032 |
5,861,032 |
0 |
5,861,032 |
Business Svcs and Economic Devlpmt |
4,604,737 |
590,045 |
1,000,000 |
1,590,045 |
Metropolitan Police Department |
3,928,169 |
2,398,546 |
(1,035,565) |
1,362,981 |
Fire and Emergency Medical Svcs Dept |
4,102,434 |
4,104,102 |
0 |
4,104,102 |
Department of Corrections |
(198,238) |
0 |
0 |
0 |
Office of the Chief Medical Examiner |
49,849 |
0 |
0 |
0 |
D.C. Public Schools |
3,589,061 |
0 |
0 |
0 |
State Education Office |
23,821 |
0 |
0 |
0 |
Department of Parks and Recreation |
161,245 |
(78,462) |
239,707 |
161,245 |
Department of Health |
4,717,254 |
5,792,578 |
(3,291,359) |
2,501,219 |
Department of Human Services |
335,257 |
173,699 |
39,328 |
213,027 |
Department of Public Works |
574,689 |
371,136 |
(370,899) |
237 |
Department of Motor Vehicles |
404,747 |
284,726 |
120,021 |
404,747 |
Alcoholic Beverage Regulation Admin. |
1,674,069 |
1,674,069 |
(1,124,069) |
550,000 |
Child and Family Services Agency |
(48,635) |
0 |
0 |
0 |
Department of Mental Health |
(1,011) |
0 |
0 |
0 |
Office of the Chief Technology Officer |
(1,085) |
0 |
0 |
0 |
Adjustment for Exp's in
Process/Emergency/Unavailable |
(16,000,000) |
|
|
0 |
Grand Total |
22,015,610 |
22,937,203 |
(905,129) |
22,032,074 |
ATTACHMENT 2: Local Funds Savings Targets ($ in thousands)
Agency |
Agency Name |
Local Budget (PS + NPS) |
Final Savings Target |
AC0 |
OFFICE OF THE D.C. AUDITOR |
1,335 |
0 |
DX0 |
ADVISORY NEIGHBORHOOD COMMISSION |
810 |
0 |
AS0 |
OFFICE OF FINANCE & RESOURCE MGMT |
2,241 |
44 |
AF0 |
CONTRACT APPEALS BOARD |
748 |
72 |
DL0 |
BOARD OF ELECTIONS & ETHICS |
3,569 |
0 |
CJ0 |
OFFICE OF CAMPAIGN FINANCE |
1,391 |
0 |
CG0 |
PUBLIC EMPLOYEE RELATIONS BOARD |
693 |
17 |
CH0 |
OFFICE OF EMPLOYEE APPEALS |
1,562 |
56 |
AD0 |
OFFICE OF THE INSPECTOR GENERAL |
11,234 |
348 |
AT0 |
OFFICE OF CHIEF FINANCIAL OFFICER |
74,275 |
1,100 |
ZZ0 |
WILSON BUILDING FUNDS |
8,859 |
230 |
Subtotal, Independent Agencies |
106,717 |
1,867 |
|
|
|
|
AA0 |
OFFICE OF THE MAYOR |
7,469 |
39 |
BA0 |
OFFICE OF THE SECRETARY |
2,423 |
48 |
CW0 |
CITY-WIDE CALL CENTER |
1,954 |
100 |
VA0 |
OFFICE OF VETERAN AFFAIRS |
230 |
55 |
Subtotal, Chief of Staff |
12,076 |
242 |
|
|
|
|
AE0 |
CITY ADMINISTRATOR / DEPUTY MAYOR |
6,560 |
240 |
TO0 |
OFFICE OF CHIEF TECHNOLOGY OFFICER |
12,411 |
25 |
Subtotal, City Administrator |
18,971 |
265 |
|
|
|
|
BE0 |
D.C. OFFICE OF PERSONNEL |
14,562 |
1,035 |
HD0 |
HUMAN RESOURCES DEVELOPMENT |
3,711 |
28 |
PO0 |
OFFICE OF CONTRACTS & PROCUREMENT |
13,172 |
10 |
AM0 |
DEPARTMENT OF PROPERTY MANAGEMENT |
7,231 |
215 |
CB0 |
OFFICE OF THE CORPORATION COUNSEL |
30,586 |
100 |
KA0 |
DEPARTMENT OF PUBLIC WORKS |
107,796 |
1,214 |
KT0 |
DEPARTMENT OF TRANSPORTATION |
|
556 |
KV0 |
DEPARTMENT OF MOTOR VEHICLES |
28,830 |
520 |
JF0 |
DC ENERGY OFFICE |
214 |
15 |
Subtotal, DM for Operations |
206,102 |
3,693 |
Agency |
Agency Name |
Local Budget (PS + NPS) |
Final Savings Target |
TC0 |
TAXI CAB COMMISSION |
1,030 |
305 |
EB0 |
BUSINESS SERVICES AND ECONOMIC DEV. |
16,627 |
2,336 |
BJ0 |
OFFICE OF ZONING |
2,418 |
500 |
DB0 |
DEPT. OF HOUSING AND COMM. DEVELOPMENT |
6,499 |
0 |
CF0 |
DEPARTMENT OF EMPLOYMENT SERVICES |
7,451 |
0 |
DK0 |
BOARD OF APPEALS & REVIEW |
249 |
0 |
DA0 |
BD OF REAL PROPERTY ASSESSMENT & APPEALS |
304 |
0 |
CR0 |
DEPT. OF CONSUMER AND REGULATORY AFFAIRS |
27,181 |
813 |
BI0 |
DEPT OF BANKING & FINANCIAL INSTITUTIONS |
200 |
200 |
BX0 |
COMMISSION ON ARTS & HUMANITIES |
1,764 |
0 |
Subtotal, DM for Planning and
Economic Development |
61,959 |
4,154 |
|
|
|
|
FK0 |
DC NATIONAL GUARD |
2,351 |
3 |
BN0 |
EMERGENCY MANAGEMENT AGENCY |
3,054 |
798 |
DQ0 |
COMM OF JUDICIAL DISABILITIES & TENURE |
173 |
0 |
DV0 |
JUDICIAL NOMINATION COMMISSION |
93 |
0 |
FH0 |
OFFICE OF CITIZEN COMPLAINT REVIEW |
1,446 |
118 |
FZ0 |
ADVISORY COMMISSION ON SENTENCING |
644 |
154 |
FX0 |
CHIEF MEDICAL EXAMINER |
6,167 |
1,154 |
Subtotal, DM for Public Safety and
Justice |
13,928 |
2,227 |
|
|
|
|
CE0 |
DC PUBLIC LIBRARY |
26,564 |
400 |
JA0 |
DEPARTMENT OF HUMAN SERVICES (1) |
64,078 |
0 |
RM0 |
DEPARTMENT OF MENTAL HEALTH |
142,280 |
2,890 |
HC0 |
DEPARTMENT OF HEALTH (2) |
45,477 |
900 |
HA0 |
DEPARTMENT OF RECREATION AND PARKS |
29,811 |
890 |
HM0 |
OFFICE OF HUMAN RIGHTS |
1,556 |
88 |
|
(1) Less IMA/TANF, MRDDA, and YSA. |
|
|
|
(2) Less APRA, MAA, and HCSN. DOH will achieve 2,500 in savings,
of which 1,600 will be
reprogrammed for HIPAA compliance and 900 will be a net reduction.
|
Subtotal, DM for Children, Youth,
Families, and Elders |
309,766 |
5,168 |
|
|
|
|
|
TOTAL LOCAL FUNDS SAVINGS |
729,519 |
17,616 |
|