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11 FE e".!'[ 9:06

ADRIAN M. FENTY
MAYOR
February 10, 2010

The Honorable Vincent C. Gray

Chairman, Council of the District of Columbia
1350 Pennsylvania Avenue, NW, Suite 504
Washington, DC 20004

Dear Chairman Gray:

As you know, the District faces a projected $223 million budget shortfall in FY2010. The Pt 2010
projected budget shortfall is the result of a decline in estimated revenue and reported spending
pressures for the fiscal year. On December 16, 2009, the Chief Financial Officer issued revised
revenue estimates, certifying a $17 million shortfall in Local Fund revenues for Pt 2010, which
began October 1. In addition, the Chief Financial Officer recently prepared a preliminary
estimate of reported FY 2010 spending pressures, representing unanticipated needs when the
budget was enacted. The Chief Financial Officer's high estimate of spending pressures totals
$206 million.

The FY 2010 gap closing plan is described below:

Spending Control: On Monday, February 1, I issued a Mayor's Order implementing a $99 million
spending control to limit spending In agencies with projected available balances. For the
remainder of Pt 2010, subordinate executive branch agencies may not make or authorize an
expenditure, obligation, or personnel action that causes an agency to exceed the reduced
spending limits. The Office of the Chief Financial Officer may adjust the allocations of spending
limits pursuant to the Mayor's Order.

Reduce Agency Spending Pressures: I have directed agency directors to reduce spending
pressures significantly. The reduction amounts will be presented in the amended FY 2010
budget on April 1.

Provide Local budget authority for dedicated revenues: At the end of FY 2009, the District had
a $275.1 million surplus in 133 of the more than 200 special purpose funds, and these funds will
receive another $454.4 million in certified projected revenue in Pt 2010. The Pt 2010 amended
budget will transfer about $85 to $100 million in revenues not planned for spending to the
general fund to support ongoing FY 2010 programs and activities. Unlike emergency and
contingency reserves, or bond escrow funds, "dedicated tax funds" and "special purpose
revenue funds" are intended to be spent on programs and services, rather than saved for
unforeseen emergencies or reserved for debt obligations. As a result of the limitations on their
use, some dedicated funds annually spend less than they collect.
I will present legislation to formally propose an amended Pt 2010 Budget Request Act on April 1,
along with a comprehensive plan that balances the FY 2011 budget.

I look forward to working with you to preserve a balanced budget for FY 2010, and to develop a
balanced budget for Pt 2011.

Sincere

. Fenty
Mayor, District of Columbia
Attachment 1: Agency Actions to Reduce Budget Pressures
MiroMean nikatencY
NonPublth Tao (GNO)
Special Micatlon Transpodalion
(GOO)
!obi Public Education System
Deparbnent d Conecnons (FLO)
Department of Corrections (FLO)
Fire and Er agency Metal Swims
Department (F130)
Tolal Pat Satity and Justice
Disability Conipensanon Fund (BM)
DC Unemployment Compensation
Fund (BHO)
Lot v CFO High CFO
SOS esdnithes
$31A $38.4 The unit projection Is based on October 2009 enrolment and current
costs for titbi t related services, room and toad, aid assessment and
evaluatios.
$12.0 $15.0 The Transportation Administrator Is regularly authorized to expend funds
above Its appropriation by court ordeal from the Distrid Court
$43A $53.4
95.7 $5.7 This fee b used to support tombs housed at the CTF, which
contra:try provided ate fined Fab. Haan, the U.S. Marshals Service
has increased attendee and revalue allection has NW to a rale where
only 922M is expected b be a/acted. The CTF contact and supporting
staff me budgeted at 627.714, This creates a shottfal of $5.7ht
$9.5 693 The Mayor's budget proposed restuctunng the DOC healthcare cathode
and the Could budget restore a portal cl the funds Br maintain the
contracts current Motors Presently, the cared has not been
restructured. At the current rate of mending, DOC specie b spend
629.714 this yearn the contract against a budget of $193M.
$5.3 $5.3 Due to
be S5 Minion budget reduction. FEMS does not have sufficient
budget b hire the %Mood recalls dam needed to flN vacant posMons
and meet** required stalling factor b staff engine companies.
$204 620.5
632 $4.0 The agency forecasts abort S28 mien In spending. Actuarial Oldies
pertaining b Disability Compensation list the yearly budgetary needs to be
In the neighborhood of $30 Ian to softie* provide coverage.
96.9 $10.1 increased Cleans Cask FY 2010 budget is $2.8M less than FY 2009
actual of $13.9M. The Distdd MI continue paying unemployment benefits
to those persons all eligible Pont FY 2009. Values based on projections
for current number of dalmerns at 4,760, unit costs per person of 64,003.
and the average number &weeks tor benefits payments Is 30 vat
Agony to Reduce Eludgbf Prcfected
Reduction In
BAIN
Pressure
Reduce number of sbienb i nonpubic Swiss by the 411.4
end din lanai year. In addition, a projection based on 3
mothsof Otha in the non•pubto barn au system shows
the budget possum Moly to be Warder' b a %Worthen
average number of weeks of service In October.
After the transfer d winos* from the Tranaportation 43.0
Administrator b the Oaks of the State Superkilendent for
Education (OSSE)occurs. OSSE will develop a budget for
spedal edusdlon transportation, ad win be moulted to
menage within list budget.
The Deportment of Corrections ail reduce the number of 42.2
inmates in the CTF by implementing Good CS&
The Depalment al Condi= Is proper% lo relegate to tat
contract Magi cost mass win be Paled saw a new
congeals ended.
Asa Anatol a hid% freeze Implemented because of the $0.0
budget reduction, FEMS mud pay mean to meet staffing
requicemenb.
The Ofke of Risk Management win MOM tie Districts SOO
Disability Compensation rules to detemins I they are aligned
with other junsdIctions.
The projection for unemployment compensation spending $2.0
be adjusted based on the meter of individuals separated
from NOM government hi FY 2010.
 Appropdaeon Me
eslinale
Health Care Finance (1170)
Health Care Finance (HT0)
Chid and Featly Services Agency
(RIO)
Department of Youth Rehabilitation
Services (JZO)
Deportment of Mental Health (RPM)
Tobl Moan Support Services
Settlements and Judgmenb Fund
RHO)
Total Finandng and Other
City-wide bed cots caddy
managed
Office ate Chief Technology Officer
ran
Law CFO High CFO Adkna to Reduce Dad PM °dad
estimates Redudion
Budget
Pleasure
$17.5 $17.5 Mame Recession Brien enrolled growth greater than padded. Mn has implemented residency certification and WI
Budget Imelda, assumed 10% unempbyment and anent begin to see savings.
unemployment b 12.4%. Mace savings idiatives not lily achieved.
$12.0 $12.0 Medicaid: Revised estimate of coat per beneficiary and enrollment growth The Medicaid program will achieve savings through ion
In Medicaid, and In the MRDD maker. Wan expected spending br some providers, reduction In
ICFNIR budget due b the WIRDD vdver, and additional
revenues from utilization nianapment recOvelles
$23.1 $23.1 In FY 2009, CFSA suspended Medicaid Ulm tor Targeted Case CFSA blonds b resurm Medicaid claiming for medic. 42.6
ManallaneM (TOM) and RehabMative Services Option dims based on Mcdicaldeligibb amylase.
Medicaid cost mord audits.
$12.6 $12.6 Increased commilmenb meragbg 37 meth a day and mediae Sled to DYRS wit achieve budgeted cost savings, aid use the 45.4
increased commitments Integrated services fund to support the unentlateled Mom*
comnitnenie
$2.3 $2.3 St E overtime anticipated bc be a the same level as last mat DMH bon bads to meat* oveMme spending at St Es 42.3
within the budget
$77.6 $81.6
$12.0 $12.0 burnoosed setlemenkc Approximabaly $8.2M dale $13.7M seaweed from Typicdy, a portond setimmet is not darned , redudng 54
the and of 680 IMFAVorkt Bank demonstrators In FY 2000 val be paid payment cost
out in FY 2010. to addition, approximately $3.811 from the September 2002
mass demonstratica Bodement will be paid in FY 2010, fa dal FY 2010
payments of $ 12.05t
$12.0 $12.0
$17.0 $23.3 Variances between forecasts and agency budgets. Including the Coundfs DMH will save by opening new hospital and moving out of 4101
etimlnailon of the $4 niim OPR bad cost budget CSA bales. The commodity cost reserve wit help to offset
unanticipated spending pressures in fixed costs.
$5.2 $5.2 Dais Service Costs: Data center lease originally planned for FY 2011 but OCTO has tided paygo funding for tha lease, mid wit 4-5.2
was accelerated to FY 2010 ($2.714) and cost of providirg mainframe coordinate with be °CFO on a memorandum of
service to District agendas ($2.5M). understandkm to pay for the ()CFO's mahframe usage.
 APPoPtiebbn Title/Agency LowCFO lit* CM Nathan Agency Adana a Reduce BudgetPressuma Projeded
'senate estimates Reduction in
Etudiet
Plenum
Told Governments, Media and S222 $28.5
Supped

SUBTOTAL SPENDING PRESSURES S175.7 MO

Red union In ream estimales S17.1 $17.1 Revenue reduclion: Account; torte reduction in outhunted revenue is FY Reduced agency spending under spading control 417.1
2010 per the December 16, 2009 revenue alma

Replenish Contingency Reserve $102 $102 Contingency Resolve: Replenish half of the amount dawn In FY 2009 from Funds WA be reprograrnmed from avallebth balances 410.2
the Contingency Reserve for the Non-Public Talon pressure of 220.31A

TOTAL BUDGET PRESSURES I $203.0 $223.3