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Council of the District of Columbia

Monday, January 26, 2015
Potential FY15 Budget Pressures
Office of the Budget Director
Jennifer Budoff, Director

FY 2015 Budget Pressures: Overview

FY 2015 Budget Pressure
As of May 28, 201, when the budget was passed
Mid-year adjustments

Expenditures
(6,801)
(47)
FEMS Overtime

As of today

(6,848)

Local Funds
Resources
6,806
(83)

Margin
5
(130)

Revenue Reduction

6,723

(125)

Increase in FY15 Expenditures:

Potential $47M+ FEMS Settlement
Per GASB rules, the entire amount must be booked the
year the judgment is finalized
Unclear if judgment will be final in FY15

FY15 Options:
1. Expected $21M settlement
2. Settlements and Judgments (S&J)

$21.7M budgeted for FY15, $18M unspent

Could also be used to fund smaller settlements after S&J is

depleted

3. Section 103/801 of the FY15 Appropriations Act

allows for payment from unallocated local funds

4. Other one-time sources of funds (see later slides)

Reduction in FY15 Revenues: $83.3M

December revenue estimate revised downward by
$83.3M
FY15 revenue still projected to be 4.3% greater than FY14
FY16 revenue is still projected to grow 3.8% over FY15
FY14

FY15

FY16

Projected local revenue

6,309

6,578

6,829

$ increase over prior FY

107

269

251

% increase over prior FY

1.7%

4.3%

3.8%

in millions

Options to address potential

FY15 revenue shortfall
Options:
1. One-time sources of funds
2. NPS, travel and hiring freeze
3. Targeted program reductions

$16M of enhancements frozen by Mayor

Bowser
Council alternatives, if any

The gap may be smaller due to:

Year-to-date underspending
Higher revenue estimates later in the FY

FY15 Option #1
Up to $63M from one-time sources of funds:
Source

Amount

Operating margin

$5.2M

Repayment of Loans and Interest

$9.8M

Certificates of Participation

$22.7M

Commodity Cash Reserve

$25M (unaudited pre-CAFR)

Subject to verification and certification by the OCFO

FY15 Option #2
NPS, Travel and Hiring Freeze:
Frequently used to address potential gaps
Key method used by the last administration to control
spending
Spending is not completely frozen, it just subject to
additional verification in the EOM
CFO is unable to quantify the savings that accrued in
previous freezes

Expect higher than usual underspending in the first

half of FY15 because of Mayoral transition
As savings accrue through FY, they would be
recognized later in the year

FY15 Option #3
Targeted program reductions:

$16M of enhancements remain frozen by Mayor Bowser:

Spending Freezes Still in Effect
Animal care and control agency grant
DC Film Incentive Fund
Family case managers for DC General
DPR summer programs
Kenilworth Parkside Community Park
Facilities planning grants to DCPCS
Healthy Tots Program
subtotal

5.0
1.5
0.6
1.5
0.3
4.0
3.1
16.0

Freezes on LRSP, SNAP and youth homeless beds lifted

Note that the under enrollment in DCPCS is projected
under spending, not a freeze
$9.9 has already been reprogrammed out
Determining amount available, if any

FY15 Option #3

(contd)

Targeted program reductions:

Councilmember recommendations
List of all enhancements in FY15 (see handout)