Mayor Anthony A. Williams
Expenditure Growth
March 6, 2002

Context

Overall, District expenditures rose by:
- 9% in FY00
- 11% in FY01
Increases were concentrated in four agencies:
- DCPS
- Charter schools
- PBC (and transition costs)
- Mental health
Excluding these agencies, the rest of the District’s budget grew by:
- 2% in FY00
- 4% in FY01

The four agencies with major growth collectively overspent their budgets by:
- 15% in FY00
- 31% in FY01
Excluding these agencies the rest of the District’s budget was underspent by:
- negative 4% in FY00
- negative 3% in FY01

Funding Pressures

45 states show revenue shortfalls
28 states show spending over budget
23 states show Medicaid over budget (other common program overspending includes mental health, corrections, and education)

Gap Closing Measures

Agency	Explanation	Spending Pressure	Closed by Agency	Proposal for Gap Closing
DCPS - Medicaid & Non-Medicaid	Medicaid revenue shortfall ($27m); cost overruns in Special Ed and Transportation, lifting of Special Ed fee cap, and teacher pay raises ($98m)	125	(35)	90
Dept. of Mental Health	Medicaid revenue shortfall ($26m) and annualized effect of pay raises in 1/01 ($3m)	29	(3)	26
Dept. of Health	Proposal to increase rates for specialty Medicaid providers has been deferred	11	(11)	-
Assessment Contracts	One-time costs for consultants to assess District’s Medicaid programs.	3	-	3
Health Care Safety net	Additional PBC close-out costs	14 -	-	14
Child & Family Services Agency	Increased adoption case rates; higher case loads for adoption and emergency group home utilization	13	(2)	11
State Education Office	Mandated census audit ($1 m) and LEAP program match and administrative costs ($0.5m)	2	-	2
Police Dept.	Overtime, terminal leave due to longevity bill, civilianization for one quarter, and modification of red light & photo radar contracts	7	(2)	5
Corrections Dept.	Delay in RIF of 400 employees, overtime and additional gross pay, and higher contract costs	15	(6)	9
Fire Dept.	Overtime, fixed cost and prior-year GSA bill	8	(7)	1
Labor Costs	Based on status of current negotiations	10	0	10
DMV	Additional adjudication costs associated with photo radar and red light programs, and meter ticketing	1	-	1
Dept. of Public Works	New impound lot and unbudgeted rate increases for contracts	9	(8)	1
TOTAL		247	(74)	173

Funding Source	Notes	Amount
FY 01 Unspent Reserve	Reflects deposit of $5m for the Highway Trust Fund	41
FY 02 Reserve Relief	Entire reserve relief will be used to fund DCPS’s pressures	30
FY 2002 Budgeted Reserve	An additional $39m is held as offset against revenue shortfall	80
Agency Reductions	Deputy Mayors are working with agencies to identify cuts	18
Red Light/Photo Radar Revenue	Based on higher-than-estimated first quarter collections	4
Total, Gap-Closing Actions		173

		FY 2002	FY 2003
One-time FY 2002 pressures:
	Citywide Medicaid contracts	3
	PBC closeout costs	14
	MPD contract modifications	5
	SEO census	2
	Workforce investments	10
	DMV	1
Subtotal, one-time FY 2002 pressures:		35

FY 2002 pressures that recur in FY 2003:
	DCPS Medicaid, special ed, transportation	90	76
	DMH Medicaid	26	26
	CFSA adoption rates and case loads	11	15
	Corrections PS and contracts	9	11
	DPW impound lot	1	1
	FEMS overtime and fixed costs	1	8
Subtotal, FY 2002 pressures that recur in FY 2003:		138	136

New FY 2003 pressures:
	CFSA compliance with mandates		9
	DHS compliance with mandates		13
	DOH specialty provider fees		11
	MPD communication center		2
Subtotal, new FY 2003 pressures			35
Total, spending pressures:		173	172

Agency	Basis for Cost Increase	Cost Increase (in 000s)
DCPS	Increase in Special Education (SE) tuition Increase in SE transportation costs Increase in SE attorney fee caps	$75,921
DOH	Legal requirement that rates must not fall to a level where services is compromised Specialty rate provider increase is needed	$11,358
DHS	Court ordered staffing increases for YSA Court ordered staffing, equipment, and facility improvements for MRDDA	$13,272
CFSA	Adoption subsidy increase Updated estimate of past rate increases for therapeutic foster homes Increase in emergency group homes and other expensive placements	$24,000
DMH	Medicaid reserve fund needed in anticipation of revenue shortfalls	$25,000
MPD	Operating costs associated with Public Safety Communications Center	$2,437
FEMS	Account for historical increase in overtime for HAZMAT unit Provide overtime (including overtime for 55 additional paramedic FTEs)	$7,948
DOC	Adjustments to reconcile funding for appropriate staffing level Rate increase in contracts for inmate health care and halfway house beds	$11,156
DPW	Rent for Impound Lot at Addison Road, due to Brentwood development	$1,000
TOTAL		$172,092