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Chief Financial Officer Natwar Gandhi
Statement on the mayor's proposed FY2008 budget
March 26, 2007




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Statement by CFO Natwar Gandhi Letter from Council Chairman Gray to CFO Gandhi


Monday, March 26, 2007 
CONTACT: Maryann Young
(202) 727-0058

Statement from the Chief Financial Officer Regarding the Mayor’s Proposed FY 2008 Budget 

During today’s Committee of the Whole Public Roundtable on the Mayor’s proposed FY 2008 budget, questioning from Council Chairman Vincent Gray and other Councilmembers may have created the impression that the Chief Financial Officer Natwar Gandhi does not certify that the Mayor’s budget is balanced. That perception must be corrected. 

The Mayor’s Proposed FY 2008 budget as unveiled on Friday, March 23 is balanced. The Chairman and Councilmembers have asked the Mayor’s office and the CFO to address funding issues that may be created if the Council does not enact the Mayor’s proposed policy initiatives which rely on those resources. 

In particular, as with any proposed revenue initiative, if the Council does not approve the Mayor’s proposed increase in 911 fees for the Office of Unified Communications, substitute resources would need to be identified. Similarly, the agency budgets throughout the government will have to absorb their fees for procurement and personnel services, and the CFO would have to certify that this is feasible for individual agencies. 

The CFO looks forward to working diligently with the Mayor’s office and Council to, as clearly as possible, identify and address any concerns the Council may have.

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Council of the District of Columbia
The John A. Wilson Building
1350 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

March 27, 2007

Dr. Natwar Gandhi
Chief Financial Officer
1350 Pennsylvania Avenue, N.W., Suite 203
Washington, DC 20004

Dear Dr. Gandhi,

I received your March 26, 2007 "Statement from the Chief Financial Officer Regarding the Mayor's Proposed FY2008 Budget". I am confused why the press release states, "questioning from Council Chairman Vincent Gray and other Councilmembers may have created the impression that Chief Financial Officer does not certify that the Mayor's Budget is balanced." Here is a brief transcript of an excerpt from my questions at the Committee of the Whole's Fiscal Year 2008 Budget Public Briefing:

Chairman Gray: Is there an imbalance based on your best professional judgment at this stage? You are the one person who has to sign off on this budget.

Dr. Gandhi: In the light of the discussion we just had, and if you look at those numbers at their face value. No.

Chairman Gray: No what?

Dr. Gandhi: No, it is not balanced.

Dr. Gandhi, you are the one person who we look to as the independent CFO to certify whether or not we have a balanced budget. I know this budget is not balanced at the present time. The unfunded cost is between $22 and $30 million, with the latter probably being a far more accurate number with the FY08 budget projecting a 58.3% increase in contractual services expenditures. I don't believe the executive branch agencies have the ability to absorb the functions of the Office of Contracting and Procurement and the Office of Personnel out of their existing budgets, and if they do, then the Mayor needs to identify what programs and services will be reduced to fund contracting, procurement, and personnel services. It was stated that agencies will receive no new personnel and procurement resources even though they are expected to "purchase" these services through intra-District transfers.

I have attached a copy of a May 11, 2004 letter from you to Council Chairman Linda Cropp stating that you could not certify cuts made by the Council of the District of Columbia to the Mayor's proposed budget Fiscal Year 2005 Budget for the following reasons:

  1. "The proposal identifies reductions at the agency level and appropriation title, without providing specific, detailed organizational or program budgets being cut.'
  2. "Those programs, activities and services being affected will need to be re-structured before the fiscal year begins in order to fit within the available budget dollars. Without specific detailed implementation plans, the District will likely face spending pressures, which could result in potential violations of the local anti-deficiency law and result in an unbalanced budget.'
  3. "Because of the lack of program, activity, and service specificity in all the budget reductions the Council is considering today, I cannot calculate the fiscal impact of these actions and as a consequence cannot certify these actions, if taken, maintain a balanced budget and five year plan."

I don't need to point out the obvious similarities to our current situation.

On a slightly different matter, I was also surprised when I read in the Washington Post and heard at today's hearing that the Mayor stated the E-911 tax was included in the baseline budget. This seemed to me clearly an executive branch policy decision, and I cannot understand why your Office of Budget and planning would include a policy decision to increase revenue generated from the E-911 tax in a baseline budget for expenditures. please show me where in the Fiscal Year 2008 baseline budget you submitted to the Council on February 28, 2007 you included an increase to the E-911 tax.

Please contact me at 724-8068 if you have any questions.

Vincent C. Gray

cc: Mayor Adrian M. Fenty
Councilmembers of the District of Columbia

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