The Jack Evans Report

Georgetowner • May 31, 2011

This has been a very busy time at the Council. On Tuesday, May 24, the Council passed the Fiscal Year 2012 budget for the city. Mayor Gray submitted his FY 2012 budget to the Council on April 1. During the six weeks that followed, the Council held hearings on the budget and each committee considered and marked-up its portion. Chairman Brown then met with each Councilmember and put together a revised budget, which was passed on a first vote on Tuesday. A final vote will take place on June 14.

The budget, at over $11 billion, is the largest in the District’s history. The Council wisely repealed Mayor Gray’s attempt to raise the personal income tax, keeping the rate at 8.5%. It also rejected the proposal to tax live theatre. A number of safety net cuts made by the Mayor reducing funding for homeless and housing services were added back by the Council. Finally, the Council increased funding to the Metropolitan Police Department to ensure we have at least 3,900 sworn officers on the force.

The one item I disagreed with was the Council’s decision to tax the interest on municipal bonds. In the original Chairman’s budget, the tax on the interest would not go into effect if we have a revenue increase in June. Seven of my colleagues repealed this provision and, as of now, previously untaxed municipal bonds will be taxed at 8.5%.

Finally, 50% of our anticipated increase in revenue will be placed in our reserve fund to build this back up again. Although I believe the City spends too much money, the budget overall addresses my concerns for this year.

The other major item that was moved forward on this week was the District’s redistricting plan. I, along with Councilmembers Brown and Mendelson, have worked very hard to put together a plan that redraws Ward boundaries to conform with the new Census data. The plan was released on Tuesday and passed by the Subcommittee on Thursday. It comes to the full Council for a vote on June 7. More information on this process and the outcome will be forthcoming.

Jack Evans •

-By now homeowners in the District will have received their annual property tax assessment from the Office of Tax and Revenue. The Chief Financial Officer (CFO) tells us that overall the value of residential properties has declined between 3 and 4 percent, and commercial properties have declined by just over 10 percent. The CFO has also recently released his February revenue estimate report, which will show a decline for FY 2011 of about $71 million for property taxes — largely stemming from the decline in commercial property values.

To me, this is no great surprise. Given the state of the economy I fully expected commercial property to start showing a decline in value. An interesting observation from residential property is that the decline is largely on the east side of the city — where foreclosures have been highest — and that values in Ward 2 have remained fairly stable.

One policy hitting a number of taxpayers this year is the institution of what’s called the 40 percent “floor” on residential property taxes. This proposal was submitted by the mayor as part of his FY 2010 budget last spring and was adopted by the council. What is the 40 percent “floor?” It basically states that a taxpayer must pay property taxes on at least 40 percent of the assessed value on their home, and no lower. I spoke up against this proposal — in fact, I noted in the budget report of the Committee on Finance and Revenue that this proposal could have some negative consequences on tax bills — particularly for seniors. Now that the bills have come out, we are indeed seeing that. As part of our budget oversight hearings this spring, I will be asking the Office of Tax and Revenue for further data on this matter and its impact, and I’d appreciate you sharing your experiences and observations with me as well. We have heard from residents whose property tax bills have essentially doubled — which back when I passed the 10 percent cap was something I wished to avoid. So, your input is welcome.

All this being said, with the downturn in commercial property values — which is a situation that I think will continue for a few years – we need to be especially careful in our budgeting for FY 2011 and onward. Property speculation, both residential and commercial, led to the bubble which collapsed along with Wall Street in the fall of 2008. I do not think we will return any time soon to the days of quarterly revenue increases that we can use to continue to expand our government and pay the bills. In short, we have to create a post-bubble budget that lives within our means. The most important part of that exercise is restraining growth. Dr. Gandhi, our Chief Financial Officer, also let us know that to continue the current functions of the D.C. government from FY 2010 to FY 2011 there is a growth of over $400 million, even if we add no new programs or spending. So are there hard choices ahead? Yes there are, but I think between the mayor, the council, and the CFO we are ready to make those difficult decisions.

The author is a city councilmember representing District Ward 2.

Jack Evans •

-Last week, we lost two giants of Ward 2.

While most people have probably heard the news, I want to take a minute still to recognize and remember the lives of Charles Bermpohl and Miles Groves.

Charlie is best known around town for his seven-year stint at The Current, covering the ins and outs of Georgetown. He loved reporting. He loved his job. That’s more than many of us can say and for that we should count him lucky.

One look at Charlie and you knew right away that he was a reporter. Why? Because he looked like one. The Columbo trench coat, the fedora, the pad and pencil — the quintessential reporter.

Anyone who knew him knew that he was much more than your regular newspaper man. He was insightful, fair-minded, he asked good questions, and most importantly — he cared. He used these attributes, which I don’t see in most reporters these days, to get at the heart and truth of a story. With the Internet and the 24-hour news cycle, this doesn’t come as easily as it used to.

50 years of reporting in New York, Florida, and the District means that we aren’t the only ones missing Charlie today.

For those who would like to pay tribute to Charlie, an “Irish wake” will be held in his honor on April 24 from 2 to 4 p.m. at McLean Gardens Ballroom.

Miles Groves lived downtown since the mid-1990s and through the founding of the Downtown Neighborhood Association four years ago, is credited for bringing together downtown residents and business owners on key issues that affected the neighborhood.

Miles was instrumental in several projects and initiatives in and around Downtown. From negotiating ABRA agreements to fighting crime to addressing a broad range of quality of life issues, his accomplishments were many. Miles not only witnessed the transformation of Chinatown and the downtown, but was instrumental in making the neighborhood what it is today. For this, we are all grateful.

Community members, leaders, and activists will gather on March 24 at 6:30 p.m. at the Calvary Baptist Church to honor Miles and his great contributions to the District and downtown.
Our thoughts and prayers go out to the family, friends, and the countless number of District residents who were touched by the lives and work of Charlie and Miles.

They are truly missed.

The author is a city councilmember representing District Ward 2.

Georgetowner •

-Recently, Mayor Fenty released his FY 2011 budget plan to the council and the public. The budget proposes $5.27 billion in local funds, which is a decrease of 2.78 percent from FY 2010, and addresses the spending and revenue gap of $523 million between FY 2010 and FY 2011.

At first glance, the mayor’s budget continues to make investments in schools, both public and charter, funds the health care safety net — which faces greater utilization during an economic downturn — by improving the way we pay for these services, funds 4,069 uniformed officers as part of the Metropolitan Police Department and continues infrastructure improvements.

The mayor’s budget proposes to close the gap in various ways — eliminating 385 full-time employees, renegotiating various contracts, freezing salary increases, controlling spending by instituting cuts at District agencies, hiking a number of fines and fees and using $97 million in unallocated fund balances to balance the budget. More details of the mayor’s plan will be available once all the budget volumes and the FY 2011 Budget Support Act legislation are released.

I greatly appreciate the hard work it took for the mayor, his staff, and the chief financial officer to prepare and present this budget to the Council, particularly given the magnitude of the budget gap we face from FY 2010 to FY 2011. I am particularly glad the mayor avoided tax increases while protecting much of our public education, health care delivery, and public safety functions. But there are many details yet for the council to review through our public hearing process this spring, and invariably changes will be made.

I am concerned about using unallocated fund balances to help balance the budget, and we’re all awaiting full details on cuts to various agencies. Over the next two months, I will be working with Chairman Gray and my colleagues to come up with a final plan which is in the best interest of everyone in the District. However, I do think the mayor has made a good start and in what is a very, very challenging set of economic circumstances.

The council has just 56 days to review and vote on the proposed budget for the 2011 fiscal year, which begins Oct. 1. The proposed budget submitted by the mayor is available at www.budget.dc.gov.

The Committee on Finance and Revenue, which I chair, will hold its fiscal year 2011 budget and financial plan hearing on April 28 at 10 a.m. in the council chambers. To sign up to testify, contact Sarina Loy at sloy@dccouncil.us or 202-724-8058.

The author is a city councilmember representing District Ward 2.

Jack Evans •

-The anticipation at the Verizon Center last Wednesday night could not have been greater. The Washington Capitals, our great hockey team with the best record in the National Hockey League, was playing in Game 7 of the first round of the playoffs against the Montreal Canadiens.

The Caps, after losing the first game at home, ran off three straight wins and led the series 3-1. They then lost one at home and one in Montreal. We all knew the Caps were the better team and looked forward to a great victory at home. It was not to be and we lost 2-1. Thus another disappointing end for a Washington team, a city that hasn’t had a championship in the big four since the Redskins won the Super Bowl in 1992.

Washington has now gone longer than any other city without a championship in a major sport. (As an aside, kudos to Mark Ein of the Kastles and D.C. United — both teams have brought championships home to the District.)

So where is the future of Washington sports headed? Actually, to a very promising place.

The Capitals will be back next year just as good and hopefully advance to the finals. The Redskins appear to have a good coach, a new quarterback, and a new outlook. We will all have our fingers crossed come September. The Wizards franchise may have a future. Ted Leonsis (of Caps fame) now owns them and we hope he can bring his winning ways to our lackluster basketball team. Good luck, Ted.

Finally, have you been to a Nats baseball game this year? Go. The team has a winning record and is off to its best start since their first season in 2005. It’s probably too early to tell but we may be in for an exciting summer.

So here’s to the future of Washington professional sports. The day will come when we again bring home a championship.

The author is a city councilmember representing District Ward 2.

Jack Evans •

-Next week on Wednesday, May 26, the D.C. council will vote on the fiscal year 2011 budget. The District’s next fiscal year runs from October 1, 2010 through September 30, 2011. The current budget was prepared by the mayor beginning in October 2009 and submitted to the council on April 1, 2010.

By law, the council has two months to hold hearings and pass a budget. It is then sent to the mayor for his veto or approval. If approved, it is then sent to Congress for their approval by October 1, 2010.

Because of the slowdown in the economy, the city’s revenues are no longer increasing and, as such, reductions need to be made in our spending. The mayor’s FY 2011 budget is balanced and relies on significant spending cuts and increases in a number of fees and penalties. It also relies on spending additional money from our fund balance, i.e. our savings account.

I have analyzed the mayor’s budget carefully and have the following observations.

The cuts he recommends are painful but necessary. The amount the city spends has increased significantly the past 10 years and now it is time to reduce spending. Tough choices need to be made.

The fee and penalty increases are problematic. Our residents and businesses are tired of being nickeled and dimed to death. People don’t want to pay this government any more money. Thus the proposal to increase parking meter fees and charge more for basic licenses, etc. should be reversed.

Finally, spending more from our savings account to fund agency operations is bad policy. In 2007 our fund balance was $1.6 billion. It is currently $920 million and would be $600 million in 2012. The city would have spent $1 billion of its savings, which will really hurt our position in the credit market.

If the council does not accept the mayor’s increases in fees and does not wish to spend from the savings account, it must identify additional funds to balance the budget. In addition, many members of the council want to add back the mayor’s cuts and unrealistically fund new programs. This also takes new money.

Several council members want to raise taxes to pay for this spending. Nothing could be worse for the city. Increasing taxes in a recession is bad policy because it allows the spending to keep increasing, forcing us to increase taxes again the next year. The proposals put forward include, among other things, a raised income tax, new taxes on tax-free bonds, and extending the sales tax to services. Given that the District is ranked 51st in tax burdens, it is very counter-productive.

I will continue to work hard to balance our budget without further burdening our residents and small businesses.

The author is a city councilmember representing District Ward 2.

Jack Evans •

-Over the last week, I have received lots of correspondence from constituents regarding the surplus disposition of the Hurt Home in Georgetown — particularly with respect to the proposed size of the redevelopment, as well as its potential impact on neighborhood parking, both of which are concerns I share.

This is a matter being actively considered by the council, as surplus property dispositions must be approved legislatively, and thus your input is both timely and welcome. A vote on this matter is not likely to be held until July 13, if then. But first, a bit of a history of the Hurt Home.

Built circa 1897, it is believed that the Hurt Home was originally used as an assisted living facility for the blind. The District obtained the property in 1987 from the Henry and Annie Hurt Home for the Blind and the Aid Association for the Blind of the District of Columbia, two non-profit organizations. Most recently, the building housed the Devereux Children’s Center, a residential and psychiatric program for foster children.

For the last five years, the Hurt Home has been vacant. In 2009, D.C. made the decision to sell it, as it did not suit any current District function and would have been prohibitively expensive to renovate or maintain in its current form. In June 2009, the District issued a solicitation for proposed uses of the property and by September, only one submission was received.

The proposal by the Argos Group, which included 35 apartment units, was presented to both the ANC and the Citizens Association of Georgetown during the fall, and a project award was made in April 2010. The District held a surplus/disposition meeting at Jelleff on June 9 and the council’s government operations and economic development committees convened a joint hearing on June 16 for public input on the matter. That hearing will be continued on July 1 at 3 p.m. in Room 123 of the Wilson building. If you would like to testify at that hearing, or submit testimony for the record, please contact Priscilla Ford at 727-6684 or pford@dccouncil.us.

I am concerned that the current plan contains too many proposed units, which would contribute to an increase in the demand for parking in the neighborhood. I am committed to working with the community as well as the developer to make this a more reasonable proposal and address the community’s concerns.

Should the city council decide to approve the surplus and dispose of the property from its inventory, the selected developer would then begin the process of presenting proposed plans to the ANC and Old Georgetown Board for the necessary approvals to obtain permits for the project. This part of the process, as well as any Planned Unit Development (PUD), would also include opportunities for public comment and discussion about the project. I am hopeful the proposal can be improved considerably before it gets to that point. A reuse of this property would be great and very much welcome, but I would like to see it occur in the best possible way for the neighborhood.

The author is a city councilmember representing District Ward 2.

Jack Evans •

-As we’re suffering through Washington’s worst heat wave of the year, take a moment to check in with your elderly or ill neighbors who might need a little assistance. Weather like this can effect even the healthiest of us.

This promises to be a long, entertaining summer in terms of Washington’s number one spectator sport, politics. With heated contests for mayor, council chair, two at-large seats and four ward council seats, there will be no shortage of candidate forums, neighborhood rallies and straw polls.

The best thing that any Washingtonian can go do is get out there and participate. Attend a neighborhood forum and ask the candidates about what’s on your mind — from education to crime, from the economy and jobs to improving city services. I truly believe each of us has something to contribute to this important dialogue about the future of our city. So in addition to our new pitcher Stephen Strasburg heating up the mound at Nationals Park and the Washington Kastles gracing downtown with World Team Tennis this month, we have plenty in the sport of politics to look forward to!

The responsibility of governance will return soon enough in the fall and we have many challenges ahead. We may even have to revisit the FY 2011 budget, due to declining revenue projections. It’s anyone’s guess, but looking at states and localities around the country, one can’t but watch and continue to wonder. Jurisdictions are trimming back, instituting employee reductions, mandating furlough days and retrenching some programs. Some states are even borrowing from pension funds to meet current expenses and issuing IOUs to taxpayers for tax refunds the states cannot afford to send. I am grateful D.C. has managed to do better than others, but I do have to chuckle a bit when I read these stories about other states — who’s calling for control boards for THESE folks?

President Obama and some in Congress have been talking about additional stimulus spending, particularly to keep state employees and teachers on the job. While there are merits to this, it would also add to the federal deficit most likely, in itself another problem. Ultimately I think that may be a short term fix at best, which I’d rather avoid. We’ve managed to avoid a severe day of reckoning here in D.C. through a variety of means — some of which I don’t support — such as spending reserves and other one-time measures. Ultimately, given the unlikely return of the “irrational exuberance” in the boom economy of a few years ago, we will have to align the District’s budget to actual sources of revenue, which can be tweaked here and there, without the use of one-time gimmicks and fixes. In short, while our most recent revenue estimate is flat — which is good news in itself — we still have yet to address some of the fundamental, structural problems with matching the size of the government to our revenue sources.

Finishing up, I want to take a brief moment to remember my staffer Desi Deschaine on the upcoming one-year anniversary of his death. We have truly missed Desi as part of our office and part of our lives, and I know those of you who were touched by him do as well. Here’s remembering you, Desi — you remain in our hearts and minds.

Jack Evans •

-I’m feeling a little more optimistic these days and wondering if we are turning a corner, at least in one respect, with regard to the economy. For the first time in the last couple of years, I can see how some development projects important to Ward 2 could move forward. The key in all instances has been this: access to capital is opening up and people are looking for places to invest. Fortunately, I think D.C. has rebuilt and maintained a good reputation over the past decade as a good place to invest. Not just because of the relative economic stability that comes with the presence of the federal government, but also that we, as citizens, have brought the city back to life. We are no longer the financial and physical wreck we once were a decade ago, and if I have anything to do with it, we will never, ever return to those days. That doesn’t mean there aren’t still challenges ahead, of course.

I think the economy is warming up a bit, and what that means is investment capital is loosening and looking for a place to go. D.C. needs to be in the position to say, like a kid perhaps, “Pick me, pick me!” We are doing all we can to make this happen and having conversations about projects large and small across the city and ward.

Of particular interest are the Market at O Street project in Shaw and the new Convention Center hotel on Ninth Street. Both of these projects, after several financial delays, appear to be back on track and moving. I particularly appreciate the hard work of Roadside Development in moving the O Street project forward. Imagine trying to finance a development that contains a new Giant grocery store, a hotel, condos, senior housing, an underground garage, and other retail. The financing for each of these components, in case you didn’t know, can be quite different. You can secure financing for the grocery store, but there was a serious downturn in financing hotels for quite some time. The complexity of the financing of this project cannot be underestimated, so I am especially glad we’ll see a groundbreaking in earnest in early September. Bravo! This truly is a lynchpin project in the heart of Shaw that I believe will help spur other positive investment.

The new Convention Center hotel, likewise, is making headway after a period of stalling. The District stepped up to the plate to help provide bond financing for the project, but a dispute between JBG and Marriott on some other issues delayed moving forward on the matter. Like any number of other disputes, you just have to get the parties to keep talking, and I salute the work of Attorney General Peter Nickles in getting the two parties to settle so we can move forward on issuing the bonds, with groundbreaking commencing shortly thereafter. This project too will serve as a catalyst on the west side of the Convention Center and will help serve as an anchor to further investment along Ninth Street in Shaw.

The District government, of course, has very little influence on the national economy, as one might expect. But, where we can make a difference is in two ways: by stepping up to the plate as needed and providing financial assistance to close gaps and move projects forward in tough economic times and by keeping our nose to the grindstone and not giving up on projects we know will be a success, such as these two. There have been many challenges standing in the way of both of these projects — political, economic, logistical, etc. — but I have found that if you keep focused, you will be prepared to move forward when things are looking up again. And at this juncture, I think things are looking up.