THE MAYOR'S FISCAL YEAR 2008 BUDGET AND FINANCIAL PLAN:
"MOVING FORWARD FASTER"
COUNCIL OF THE DISTRICT OF COLUMBIA
THE HONORABLE VINCENT C. GRAY, CHAIRMAN
TESTIMONY OF ADRIAN M. FENTY
MAYOR
DISTRICT OF COLUMBIA
MONDAY, MARCH 26, 2007
Introduction
Chairman Gray and members of the Council, it is my
pleasure to be here today to speak to you about my Fiscal Year 2008
Budget and Financial Plan, entitled "Moving Forward Faster."
I want to note that for the past six years, I took part
in this process by sitting where you now sit. This is my first budget
proposal as Mayor. I would like to thank you for your leadership,
cooperation and friendship in putting the budget together.
We looked at the District Government agency by agency and
line by line. In looking at what works and what doesn't, we have
developed a budget that will invest in. some areas and reduce in others.
We have major improvements in store in the areas of education; public
safety; healthcare; human services; infrastructure and environment;
economic development and affordable housing; and government operations
and financing.
Budget Summary
We're confronted with budget pressures in Fiscal Years
2007 and 2008 totaling more than $300 million. So my administration has
worked closely with Chief Financial Officer Natwar Gandhi to develop a
budget that rose to the financial challenges while delivering the
services our residents expect. This is a $9.2 billion spending plan with
$5.4 billion in local funds. We have found economies, but propose
targeted investments in areas of high priority. This document is the
product of a series of exhaustive, agencyby-agency meetings conducted
with the CFO's office and begun during my transition into office. The
budget is balanced and fulfills promises in my "100 Days and
Beyond" plan while addressing key Council priorities.
The budget also includes recommendations for a 6-year
capital program representing long-term investments worth more than $3.3
billion, including $580 million in FY 2008 spending of General
Obligation, Pay-As-You-Go, and Master Lease capital funds. Some of the
highlights for each area are described below.
Education
This budget proposes to increase the uniform per-pupil
funding formula for the DC Public Schools and DC Public Charter Schools
by 4 percent. I also propose to fully fund the historical costs of
Special Education transportation-and I will work with the Council to
drive down that cost by improving the quality of special education
offerings in local schools. In addition, this budget rationalizes the
per-student funding for DCPS and charter schools. I propose to
discontinue the prior practice of funding public charter schools for next year's projected enrollment
while funding the public school system for last year's actual enrollment
- a practice that resulted in the double-counting of thousands of
students. Both public and public charter schools will be funded based on
estimated enrollment for the coming school year. To ensure dollars are
available if actual enrollment exceeds estimates, I propose creating a
stabilization fund similar to one that has been used for charter
schools.
Finally, the FY 2008 proposal also includes, consistent
with my Education Reform bill, a new firewall between funding for local
schools and state education activities, which previously had been
intermingled within the budget of DCPS - contradicting existing law. My
proposed education budget, including funds set aside for state education
activities in the District's Non-Departmental account, will support
implementation of my Education Reform initiative upon passage of the
legislation.
Other education investments include a 7 percent increase
in local funding for the University of the District of Columbia and a 12
percent increase in funding for the public libraries. Library funding
will continue Sunday and extended hours added last year, and fund new
technology upgrades and expanded youth programs. In addition, this
budget reflects my full commitment to the comprehensive School
Modernization capital program and to a sustained, multi-year effort to
bring library facilities into the digital age.
Public Safety
I propose to invest across the public safety cluster an
increase of $67 million in Local funds, or 8 percent, over FY 2007
levels to support a safer and better protected city. A $48 million Local
funds increase in the budget of the Metropolitan Police Department will
enable MPD to phase in the civilianization of 82 positions and ramp up
to 300 additional officers on patrol in our neighborhoods. A targeted
investment in technology, protective gear and training will ensure that
the force becomes more efficient and better equipped as it grows.
An increase of $470,000 in personnel costs to the
District's Forensic Technician Training Program located at the FBI
Forensic Laboratory continues the city's investment in crime fighting
tools, and helps pave the way for a new and fully-staffed,
state-of-the-art consolidated lab facility, one of my top capital budget
priorities.
The Fire and EMS Department budget also grows by 7
percent, nearly $12 million in local funds, with an emphasis on
improving medical outcomes. Recognizing the tremendous cost to the city
from ambulances stuck waiting at hospitals, the budget proposes an
innovative program to put FEMS staff at six local hospitals to ensure
that our ambulances get back on the streets quicker. Additional funds
are also provided for upgraded technology, equipment and training. The capital
budget funds major renovations and repairs to the District's fire houses
over the next six years.
The Homeland Security and Emergency Management Agency
will receive additional resources to carry out its expanded
responsibilities under the Homeland Security, Risk Reduction and
Preparedness Act. In addition, HSEMA will become the lead District
agency collecting and allocating the annual federal Homeland Security
grants. Additional resources in the Office of the Chief Medical Examiner
will support mass casualty planning as well as expanded death
investigations and certifications.
For the Department of Corrections, I propose a funding
level that allows substantial improvements in the administration of the
District's correctional system. The Mayor's Budget funds 35 additional
correctional officer positions to allow for a smooth transition for
retiring officers. In addition, the budget provides both operating and
capital funds for enhanced jail security and prisoner monitoring.
The Office of Unified Communications sees an increase of
more than one-third of its gross funds budget, funded by more fully
maximizing the existing Special Purpose Revenue Fund for critical E911
services and operations, as proposed in the OCFO-developed baseline
budget. The OUC budget also includes the consolidation of the DMV and
DHS call centers with the Mayor's City-Wide Call Center, in keeping with
my promise to implement best practices from other major cities.
The Mayor's budget also provides enhanced funding for the
Attorney General's office - a 7% increase to allow for better agency
representation, a stronger defense against claims, and improved training
and professional development for staff attorneys. Funds will support the
continuation of the innovative Access to justice initiative to help
those of limited financial means gain access to legal representation.
Finally, additional resources in the Inspector General's
office will support expanded audits of the Medicaid function across all
District agencies, to enhance the integrity of the program.
Healthcare
By supporting continued enrollment growth in Medicaid and
the Locally funded Alliance, the FY 2008 Budget moves the District one
step closer to universal health care coverage. In addition, targeted
investments will expand programs in HIV/AIDS surveillance, improve
outreach and intervention to reduce infant mortality, and support an
analysis of medical provider rates. While the budget reflects
conservative estimates of expected participant enrollment, costs, and
estimated Medicaid reimbursements, there is room for potential savings
in FY 2008 in these areas. I will make it a priority to recapture as much as possible through Medicaid
reimbursements. In addition, a new set of contracts will soon be
negotiated for both Medicaid and Alliance providers that could yield
program savings.
My investments in healthcare also extend to the area of
mental health. Here I propose additional investments necessary to meet
the terms of a settlement with the justice Department -- and to move the
Department beyond receivership and toward providing high-quality mental
healthcare for our residents. Increases will fund more appropriate
staffing levels at Saint Elizabeth's Hospital, a mobile crisis response
team for children, and a 72-hour emergency psychiatric center.
Human Services
In keeping with my vision for a more inclusive city, the
Mayor's Budget includes funding increases across several Human Services
areas, while realigning agencies in accordance with recently adopted
law. The Department of Human Services will become a leaner, more focused
agency. The proposed budget funds additional cash assistance to families
receiving monthly Temporary Assistance to Needy Families (TANF)
benefits, expands the Adult Protective Services division, and maintains
subsidized early care programs enrolling more than 23,000 District
children.
In FY 2008, the new Department of Disability Services
will include the former Mental Retardation and Developmental
Disabilities Administration and the Rehabilitation Services
Administration. The new agency's budget is realistic and sets an
aggressive, achievable goal of increasing federal reimbursements through
better use of funding from sources like the Medicaid waiver.
The budget reflects substantial continued investments in
the Child and Family Services Agency and the Department of Youth
Rehabilitation Services (DYRS) to support the progress of these
agencies. CFSA will have resources to subsidize hundreds of additional
adoption and guardianship placements, ensuring more children can be
diverted from the foster system and receive the benefits of permanent
family placements. The Mayor's Budget will permit DYRS to continue
development of an effective, community-based continuum of care for youth
involved with the juvenile justice system.
The Mayor's Budget also includes funding for the new
Office of Disability Rights to ramp up to 10 FTEs over the course of FY
2008. In addition the budget provides Local funds increases to both the
Office of Human Rights as well as the Office of Aging, which plans to
open a new senior wellness center in Ward 1 in FY 2008.
Infrastructure and Environment
The Mayor's Budget continues investment in infrastructure
maintenance and improvements while also recognizing the importance of
our environment, parks, and recreation facilities. The biggest single
gain is in the Department of the Environment (DOE) with a proposed Local
funds increase of nearly $10 million proposed for FY 2008. This increase
will fund enhanced programs in enforcement, expanded home heating
assistance for low-income households, coordinated lead abatement, and an
initiative to investigate energy savings in government facilities. The
FY 2008 funding commitment by the Fenty Administration will ensure that
the new DOE can begin to be an effective player in protecting and
enhancing our environment.
The road maintenance and transportation management
capacity of the District Department of Transportation (DDOT) will be
expanded through a one-time infusion of PAYGO capital funds. Increased
funding flexibility is provided to the agency through a legislative
proposal that would reduce the number of funds and create a unified
transportation fund for local roads operating, maintenance and capital
investments. DDOT will also assume unified control over traffic aides
and school crossing guards - giving the agency on-the-ground presence in
its efforts for pedestrian safety improvements. Finally, the
Department's Urban Forestry Administration will assume responsibility
for managing the trees on the grounds of Parks and Recreation
facilities.
With a 5 percent increase in local funds, and larger
percentage increases in other fund sources, the Department of Public
Works will expand its neighborhood cleaning activities and enhance
parking enforcement. The Department of Motor Vehicles (DMV) will
reinvest savings from increasing the time between inspections and
license renewal in customer service improvements. A sizable capital
investment will help prepare DMV for the forthcoming Real-ID Act
requirements for enhanced license security.
Additional funding in the Department of Parks and
Recreation will be used to restore lost Federal funds for summer
programming as well as enhance facility and ballfield maintenance. The
six-year capital budget contains roughly one-quarter of a billion
dollars in parks and recreation facility investments, including several
new recreation centers and some key neighborhood park investments
prioritized with input from the Council. The Mayor's Budget also creates
a pool of funds to allow for targeted park investments as well as to
support project acceleration. A provision in the budget legislation will
target additional revenue for further use in park investment acceleration.
Finally, recognizing the important and expanding role
that Metro plays in serving our citizens mobility needs, the budget
provides a 13% increase in WMATA operating subsidies. Included in these
totals are investments in improved bus service, including expansion of the popular Circulator service into other
neighborhoods such as Georgetown and Adams Morgan.
Economic Development and Affordable Housing
The FY 2008 Mayor's Budget also expands targeted
investments in economic development and affordable housing activities.
The Office of the Deputy Mayor for Economic Development and the
Commission on Arts and Humanities each have enhanced proposed budgets to
support a variety of high-priority economic development and cultural
investments that have been identified in close consultation with
Councilmembers and community groups. In addition, expanded resources in
the Department of Employment Services will be focused on job training
and placement for young people, re-entrants, and low-income District
residents.
The proposed budget supports the Office of Planning's
effort to assist in rewriting the zoning regulations and in implementing
inclusionary zoning. Additional investments will be made in enhanced
transportation planning, and historic preservation outreach and
education.
The Department of Small, Local Business Development
receives a $115,000 increase to allow for its continued ramp-up to a
full staff complement, focused on eliminating the backlog of LSDBE
certifications and comprehensive development of small and local
businesses.
The Department of Consumer and Regulatory Affairs (DCRA)
shifts more of its funding from local to other revenue sources, while
making investments in enhanced information technology and automation
that are designed to improve its business operations.
Funding for the Housing Authority (DCHA) subsidy, the
Department of Housing and Community Development (DHCD), and the
Department of Employment Services (DOES) are increased. DCHA receives an
increase of 4% to cover increased costs of housing vouchers, rent
supplements, and housing security. Nearly all housing-related functions
will be consolidated within DHCD. At the same time an independent,
expanded Office of the Tenant Advocate will provide tenant advocacy and
technical assistance.
Government Operations and Finances
The proposed budget includes a number of important
changes in the manner in which the District Government will operate in
FY 2008. Chief among the improvements on my to-do list are fixes for
both the procurement and personnel activities. My budget proposes an
exciting change to the way these programs are funded, while dramatically
expanding the investment in both. Under the proposed
budget, both procurement and personnel would be funded by intra-district
assessments on each agency -based on the amount of support services
consumed. Personnel would be assessed on a per-FTE basis and procurement
on a percentage of overall contractual spending. Agencies will also be
given the opportunity, over time, to gain a measure of delegated
authority and control over these functions, earning back some portion of
their assessments in subsequent budgets.
The personnel and procurement budgets were also increased
to allow for new, expanded investments in procurement employee training
and enhanced internship programs. In particular, the Capital City Fellow
program will be fully funded through the new DC Department of Human
Resources, and agencies will compete to have a fellow placed with them
for a rotation. Similar programs will be started for college and high
school interns as well.
The Office of the Chief Technology Officer will see a
substantial infusion of local operating resources, nearly $22.5 million,
or 63% more than the FY 2007 level. These funds replace an equivalent
amount of capital and master lease funds that were annually appropriated
for these activities. This change recognizes that past budget practices
were inappropriate and have had lasting effects on the cost of debt
financing for the District. This change sets a realistic and
conservative operating fund level for our substantial technology
program.
Finally, substantial increases are seen in overall
financing accounts such as employee retirement health financing, an
increase of $106 million in FY 2008 alone - the single largest increase
of any one budget item over FY 2007. Additional, large increases are
associated with the cost of borrowing for both long and short term debt
associated with capital improvements and schools modernization.
My proposed budget would also reduce the residential
property tax rate by two cents, if the Chief Financial Officer certifies
continued strength of revenues.
Conclusion
Overall, I have proposed a fiscally conservative budget
with targeted investments, a number of programmatic innovations and no
taxes added to the OCFO baseline revenues.
But the work on this budget, and that of the current
fiscal year, does not stop with this submission. In fact, the City
Administrator and I, through our continuous assessment tool, CapStat,
will continue to monitor agency spending and performance with an eye
toward cost savings and service improvements. With this budget, the
Fenty Administration is taking the first step down a long road
of continuous improvement, service enhancement and program efficiency.
We look forward to working with all the members of our Administration
Team, the Council and our citizen partners in making this government
world class in every respect.
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