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Government of the District of Columbia
FY 2010 Proposed Budget and
Financial Plan
Special Studies
Meeting
the
Challenge
Submitted to the
Council of the District of Columbia
by
Adrian M. Fenty, Mayor
The Government Finance Officers Association of the United States and Canada (GFOA) presented an award of
Distinguished Budget Presentation to the District of Columbia for its annual and capital budget for the fiscal year
beginning October 1, 2008.
In order to receive this award, a governmental unit must publish a budget document that meets program cri-
teria of a policy document, a financial plan, an operational guide and a communications device.
The award is the ninth in the history of the District of Columbia. The Office of Budget and Planning will
submit this FY 2010 Budget and Financial Plan for consideration by GFOA, and believes the FY 2010 Proposed
Budget and Financial Plan continues to conform to the GFOA’s requirements.
Government of the
District of Columbia
Adrian M. Fenty, Mayor
Dan Tangherlini Victor Reinoso
City Administrator Deputy Mayor for Education
Carrie Kohns Neil O. Albert
Chief of Staff Deputy Mayor for Planning and Economic Development
William Singer
Chief of Budget Execution
Natwar M. Gandhi
Chief Financial Officer
Members of the Council
Vincent C. Gray
Chairman-At Large
David A. Catania ........................................................ At Large
Phil Mendelson ............................................................At Large
Kwame R. Brown.........................................................At Large
Michael A. Brown .......................................................At Large
Jim Graham ....................................................................Ward 1
Jack Evans ......................................................................Ward 2
Mary M. Cheh ................................................................Ward 3
Muriel Bowser.................................................................Ward 4
Harry Thomas, Jr.. ........................................................Ward 5
Tommy Wells ...................................................................Ward 6
Yvette M. Alexander.......................................................Ward 7
Marion Barry ..................................................................Ward 8
Eric Goulet
Budget Director
Office of the Chief Financial Officer
Lucille Dickinson
Chief of Staff
Lasana Mack Anthony F. Pompa
Deputy Chief Financial Officer Deputy Chief Financial Officer
Office of Finance and Treasury Office of Financial Operations and Systems
Robert Ebel Stephen Cordi
Deputy Chief Financial Officer Deputy Chief Financial Officer
Office of Revenue Analysis Office of Tax and Revenue
David Tseng
General Counsel
Stephanie Royal
Associate General Counsel
Associate Chief Financial Officers
Deloras Shepherd Mohamed Mohamed
Human Support Services Government Operations
George Dines Cyril Byron, Jr.
Government Services Economic Development and Regulation
Angelique Hayes Tom Berger
Public Safety and Justice Education
Office of the CIO
Lee Lloyd, Director of Information Systems
Freeman Murray
Stephen Durity
Walter Fraser
Kun Hou
Afsar Husain
Darryl Miller
Office of Budget and Planning
Gordon McDonald
Deputy Chief Financial Officer
James Spaulding
Associate Deputy Chief Financial Officer
Budget Administration Financial Planning and Analysis
Eric Cannady, Director Leticia Stephenson, Director
David Kobes
Human Services & Grants Management Randall Myers
Eric Cannady, Acting Deputy Director Duane Smith
Lydia Hallums David Song
Carolyn Johnson
Robin Moore Financial Management Services
Sunday Okparaocha and Operations
Brandy Parker Sumita Chaudhuri, Director
Gizele Richards Robert Johnson
Janice Walker Carlotta Osorio
Sue Taing
Government Operations and
Economic Development Production
Viola Davies, Deputy Director Margaret Myers, Manager
Ernest Chukwuma Travis Allen
Daniel Kalegha Sharon Nelson
William Powell Renee Waddy
David Smith
Public Safety and Public Works Capital
Joshua Agbebakun, Acting Deputy Director Improvements Program
Gary Ayers David Clark, Director
Rasheed Dawodu John McGaw, Deputy Director
Amina Elzeneiny Sherrie Greenfield
Timothy Mattock Omar Herzi
Bharat Kothari
Public Education
David Hines, Deputy Director
Nicole Dean Executive Office
Alonso Montalvo Heather McCabe, Senior Medicaid Advisor
Ana Reyes Michael Sheaffer, Special Assistant
Rita Gibson
A special thank you to the many analysts from other District agencies who assisted the Office of Budget and
Planning during the preparation of the budget.
FY 2010 Proposed Budget and Financial Plan
Special Studies
Table of Contents
Introduction...............................................................................i
Service-Level Budgeting .....................................................1-1
Benchmarking ......................................................................2-1
Fixed Costs...........................................................................3-1
Pilot Study: Performance Plan for
Capital Improvements Program ....................................4-1
Financing Economic Development
in the District ..................................................................5-1
FY 2010 Proposed Budget and Financial Plan: Special Studies
Introduction
Introduction
The FY 2010 Proposed Budget and Financial Plan includes several special studies of topics that add detail and con-
text to information presented in the primary budget volume. These chapters summarize work done by the Office
of Budget and Planning, other offices in the Office of the Chief Financial Officer, and other agencies as part of their
efforts to provide decision-makers with better information upon which to make budget and management decisions
regarding the District’s finances.
This volume presents five studies:
• Service Level Budgeting - Contains agency budgets reported at the service level, grouped by their appropria-
tions titles.
• Benchmarking - Presents benchmarks grouped by 6 Mayoral policy areas. The performance data from various
programs across the District are presented as compared to jurisdictions from around the country or as a trend
over time.
• Fixed Costs - Describes the methodology for estimating fixed costs, the challenges in developing estimates, and how
fixed costs are made a part of the District’s budget. Fixed costs expenditures are a major cost driver of the District’s
overall expenditures. If fixed costs were budgeted as a separate agency, that agency would be one of the largest in the
District government.
• Pilot Study - Performance Plan for Capital Improvements Program – Provides an overview of the multi-
agency effort to coordinate neighborhood investments in the Watts Branch Stream Valley area, with a discus-
sion of developing performance measures related to capital projects. This study demonstrates how sustained
investment in a designated geographic area can result in specific outcomes for improved health and economic
well-being in the community.
• Financing Economic Development in the District – Describes the District’s policies and methods for financ-
ing economic development. It includes: broad public policy goals for economic development; descriptions of
various methods for financing economic development; and a summary of the District programs and the
District’s investments in them.
Special Studies - Introduction
i
Service-Level
Budgeting
Service Level Budgeting
The District of Columbia budget structure consists of programs, activities, and services. A program consists of sup-
porting activities, and an activity is composed of a set of services grouped around a common purpose. A service is
a deliverable or product that a customer receives.
In the Fiscal Year 2005 Budget Support Act of 2004, the Council of the District of Columbia enacted the
“Performance and Financial Accountability Amendment Act of 2004.” Specifically this Act, which was codified
into D.C. Code 47-308.01, Performance–Based Budget, states that:
“(d) Beginning in fiscal year 2006 and phasing in through fiscal year 2009 by appropriation title beginning with
Public Safety and Justice and Public Works in fiscal year 2006, Governmental Direction and Support in fiscal year
2007, Public Education Systems and Economic Development and Regulation in fiscal year 2008, and Human
Support Services and all other remaining agencies in fiscal year 2009, the Chief Financial Officer shall provide
service level budgets for any operating agency where services are a part of an activity that has a minimum thresh-
old of $5 million from the prior fiscal year’s appropriation or provides services determined by the Mayor or the
Council to be a priority for the District of Columbia.”
Due to technical limitations, and with the full approval of the then District Council Chair, full implementation of
this legal requirement was delayed for 2 budget cycles. However, with this legislation remaining in effect, the Office
of Budget and Planning, in consultation with the OCFO executive office and general counsel and the Executive
Office of the Mayor, has determined that it is necessary to proceed with the required reporting on Service-Level
Budgeting (SLB). This requirement affects those agencies within the Governmental Direction and Support, Public
Safety and Justice, Public Works, Public Education, and Economic Development and Regulation appropriation
titles that meet the minimum threshold for SLB reporting.
The enclosed SLB report contains the Baseline budgets for those agencies that fit the criteria. These figures may
differ from the final amounts shown in the Mayor's FY 2010 Proposed Budget, as we are showing these budgets
at a point in time in the budget development process. Due to publication timelines, the reporting of this level of
detail was not possible for the Mayor's Proposed Budget. The agencies are listed below, shown in order by appro-
priation title:
Service Level Budgeting
1-1
Governmental Direction and Support:
Office of the Attorney General (CB0)
Office of the Chief Financial Officer (AT0)
Office of the Chief Technology Officer (TO0)
Office of the Inspector General (AD0)
Office of Property Management (AM0)
Public Safety and Justice:
Department of Corrections (FL0)
Fire and Emergency Medical Services Department (FB0)
Homeland Security and Emergency Management Agency (BN0)
Metropolitan Police Department (FA0)
Office of Unified Communications (UC0)
Office of Justice Grants Management (FO0)
Office of Victim Services (FE0)
Public Works:
District Department of the Environment (KG0)
Department of Motor Vehicles (KV0)
Department of Public Works (KT0)
District Department of Transportation (KA0)
Public Education:
DC Public Schools (GA0)
Office of the State Superintendent of Education (GD0)
DC Public Library (CE0)
Office of Public Education Facilities Modernization (GM0)
Special Education Transportation (GO0)
Economic Development and Regulation:
Office of the Deputy Mayor for Planning and Economic Development (EB0)
Department of Housing and Community Development (DB0)
Department of Employment Services (CF0)
DC Commission on the Arts and Humanities (BX0)
Department of Consumer and Regulatory Affairs (CR0)
Service Level Budgeting
1-2
Service Level Budgeting
1-3
Service Level Budgeting
1-4
Service Level Budgeting
1-5
Service Level Budgeting
1-6
Service Level Budgeting
1-7
Service Level Budgeting
1-8
Service Level Budgeting
1-9
Service Level Budgeting
1-10
Service Level Budgeting
1-11
Service Level Budgeting
1-12
Service Level Budgeting
1-13
Service Level Budgeting
1-14
Service Level Budgeting
1-15
Service Level Budgeting
1-16
Service Level Budgeting
1-17
Service Level Budgeting
1-18
Service Level Budgeting
1-19
Service Level Budgeting
1-20
Service Level Budgeting
1-21
Service Level Budgeting
1-22
Service Level Budgeting
1-23
Service Level Budgeting
1-24
Service Level Budgeting
1-25
Service Level Budgeting
1-26
Service Level Budgeting
1-27
Service Level Budgeting
1-28
Service Level Budgeting
1-29
Service Level Budgeting
1-30
Service Level Budgeting
1-31
Service Level Budgeting
1-32
Benchmarking
Benchmarking
Since FY 2005, the Office of Budget and Planning (OBP) has worked with District agencies to complete bench-
marking studies in order to create opportunities for performance improvement. We are proud to continue this
effort for the FY 2010 Budget and Financial plan.
Background
As the nation’s capital, the District of Columbia is committed to ensuring that the city’s residents and visitors receive
the best services in the country. A critical component of achieving this goal is consistently comparing, or bench-
marking, the District’s performance with other similar and high-performing jurisdictions. Benchmarking gives
District leaders, agency managers, and other stakeholders an opportunity to assess how the District compares with
other jurisdictions providing the same services and to develop strategies for operational improvements and effi-
ciencies.
By working in collaboration, the Office of Budget and Planning and the City Administrator have selected key
indicators for comparison. The compilation of these key benchmarks presents a picture of the District’s perfor-
mance in relation to other jurisdictions. The benchmarks provide objective data on operations, funding, and ser-
vice delivery, highlighting both the city’s achievements and its challenges. District leaders and community stake-
holders can use this data to foster continued improvement in city services.
Comparison Jurisdictions
The District of Columbia’s unique blend of service delivery makes finding comparable jurisdictions difficult. The
District provides services at the special district, city, county, and state levels of government, and it supports the
nation’s headquarters for federal and foreign operations. Since no other jurisdiction in the country has the same
responsibilities, none of the benchmarks will be a perfect comparison. However, many jurisdictions do have
enough similar characteristics to make comparisons to the District meaningful. Selection factors used include the
type of government, community demographics, geography, proximity to the District, and jurisdictions with rec-
ognized leadership in the respective fields.
Fiscal Year 2010 Benchmarks
Like last year, the performance indicators are grouped by Mayoral policy area. The policy areas are:
1) Education
2) Public Safety
3) Economic Development
4) Health and Human Services
5) Infrastructure and Environment
6) Government Operations
Benchmarking
2-1
District law requires the benchmarking of 25 critical programs. The District has hundreds of programs to
choose from. Thus, it is appropriate to narrow the benchmarking focus to higher level outcomes that are often
influenced by programs that span agencies and funding sources. Our intent is to capture the performance of mul-
tiple programs in order to better assess the effectiveness of those programs by understanding the net impact on the
indicator they are meant to influence. In cases where outcome measures were not available, an output measure or
a simple statistical measurement of an activity or count at a point in time was used instead.
Each benchmark is presented with a description, graph, and analysis tied to its related program. The majority
of the benchmarks use a simple comparison of data from the District and other jurisdictions over time; thus you
can compare each period of time and observe the trend (if any). Several indicators do not include data from other
jurisdictions and purely compare D.C. results over time.
Data was collected by contacting benchmarking jurisdictions and requesting the data or by collecting it from
an open data source, such as a published report. When possible, data for the analysis was collected from the
International City/County Management Association (ICMA) Center for Performance Measurement web site. This
association has over two hundred member jurisdictions that share performance data in order to identify and share
best practices.
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-2
Education:
Excellent Opportunities for Quality Lifelong Learning
An educated populace is the cornerstone to civil society, and it is fundamental to a well-functioning democracy.
For too long, however, we have failed to deliver on the promise of a high-quality education for every resident of this
city. That time has come to an end. Our vision for the District of Columbia is a city of lifelong learners, where
achievement is the norm, not the exception.
In this section, the following benchmarks are presented:
1) No Child Left Behind Scores
2) District of Columbia Publicly Funded Schools Enrollment Trend
3) Participation in early literacy programs
Benchmarking
2-3
No Child Left Behind Scores (NCLB)
No Child Left Behind (NCLB) is a federally mandated program that requires all public schools, school districts,
and states to demonstrate “adequate yearly progress” (AYP) on the state tests and other indicators. All testing groups
required to make AYP for test data must reach or exceed the 95 percent tested target and the proficiency targets for
a unit to achieve AYP with respect to test data. The data below shows the NCLB scores for all public schools in
the District of Columbia.
Secondary Schools- Math
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-4
Secondary Schools- Reading
Benchmarking
2-5
Elementary Schools - Math
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-6
Elementary Schools - Reading
Benchmarking
2-7
District of Columbia Publicly Funded Schools Enrollment Trend
The Government of the District of Columbia has embarked on an unprecedented effort to reform the District’s
education system. The task is daunting and will require a concerted effort by the District Council, the Mayor and
his management team, multiple city agencies, community groups, commercial contractors, parents and students.
A key indicator is the trend rate of students attending public education institutions within the District. These insti-
tutions include the District of Columbia Public Schools and the charter schools that are publicly funded.
SY- School Year
The data presented is from the annual “District of Columbia Public Schools and Public Charter Schools Enrollment
Census” , and data above shows the total enrollment. The numbers shown in the table are the total number of stu-
dents present, absent, and counted on the selected audit date for each year, which is usually in early October.
Further detail can be obtained by reading each year’s report, found on the Office of the State Superintendent’s web
page (www.osse.dc.gov), under information, enrollment and student data. The trend is that the number of stu-
dents participating in public education is declining. While there are many factors that influence this trend, the
reversal or stabilization of this trend is a potential indicator that reforms are working.
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-8
Participation in Early Literacy Programs
Early literacy programs assist children ages 1 through 5 to develop the skills to prepare them to read. Early litera-
cy does not teach a child to read, but prepares the child to be ready to learn to read. The activities that encompass
early literacy expose children to the idea of reading by providing an atmosphere that is entertaining and interesting.
These activities stimulate growth in the child’s brain and helps develop an early interest in reading.
Note: Source of data is the District of Columbia Public Library.
This benchmark was first introduced in the FY 2009 Budget and Financial Plan and is intended to capture the
attendance trend over time and to thus benchmark our own performance against time. The source of data is the
D.C. Public Library, which conducts early literacy programs for District children. The measure is the participation
trend of children ages 1 to 5 in the library’s early literacy program, and the data is captured on a quarterly basis.
The attendance for the first quarter of FY 2009 is 2,409 (14.5 percent) higher than the first quarter of FY 2008.
The attendance increase is attributed to outreach the Library has done with schools and daycare providers and train-
ing in story telling and story reading that all the Children’s Librarians received.
Benchmarking
2-9
Public Safety:
A Safe City and a Secure Nation’s Capital
Our citizens and the nation are entitled to a capital city that is both safe and secure. They must feel secure in their
daily activities, and have confidence in the effectiveness of emergency responders.
In this section, the following benchmarks are presented:
1) Number of Part 1 property crimes per 100,000 residents in the calendar year
2) Number of Part 1 violent crimes per 100,000 residents in the calendar year
3) Homicide clearance rate
4) Percentage of arson cases closed with an arrest
5) Number of civilian fire deaths by fiscal year
6) Inmate on inmate assault trend
7) Inmate on staff assault trend
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-10
Number of Part 1 Property Crimes Per 100,000 Residents
Crime rates are a commonly used indicator of public safety and in this section of the benchmarking report we are
presenting two, the property crime rate per 100,000 residents and the violent crime rate per 100,000 residents.
Although they do have some flaws, crime rates do provide illustrative information, especially when it comes to the
overall trend.
Note: Crime and population data are from the Federal Bureau of Investigation’s (FBI’s) annual crime report, Crime in the United States.
These are crimes against property—burglary, larceny/theft, and stolen auto—as classified according to the
Federal Bureau of Investigation’s (FBI’s) Uniform Crime Reporting (UCR) guidelines. Arsons were not included
in the property crime rate because many cities (including our benchmark cities of Boston and Philadelphia) do not
consistently report arson data that are in accordance with national UCR guidelines. Additionally, most big city
police departments do not have primary responsibility for investigating arsons. The property crime rate in the
District in 2007 was lower than the benchmark average, and ranked fifth out of eight jurisdictions. Compared to
2006, the District recorded a 5 percent increase in property crimes. The property crime rate also increased in
Buffalo (7 percent), and Philadelphia (1 percent).
Benchmarking
2-11
Number of Part 1 Violent Crimes Per 100,000 Residents
Crime and population data are from the Federal Bureau of Investigation’s (FBI’s) annual crime report, Crime in the United States.
These are crimes against persons--criminal homicide, forcible rape, robbery, and aggravated assault--as classified
according to the Federal Bureau of Investigation's (FBI's) Uniform Crime Reporting (UCR) guidelines. In 2007,
the District of Columbia’s violent crime rate was lower than the benchmark average and lower than four of the
other cities included in the comparison. The District of Columbia’s violent crime rate decreased 7 percent in cal-
endar year 2007.
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-12
Homicide Clearance Rate
One of the key benchmark measures for the Metropolitan Police Department (MPD) is the homicide clearance
rate. The rate indicates the percentage of homicides that are closed by an arrest or exceptional means. The accom-
panying table illustrates the District’s performance with benchmark jurisdictions.
Note: The Metropolitan Police Department provided all benchmark data. Benchmark jurisdictions submitted their data to MPD in annual surveys. Some cities do not provide all requested
data each year and those jurisdictions are labeled as NA. The homicide clearance rate is calculated according to the Federal Bureau of Investigation’s Uniform Crime Reporting (UCR) guide-
lines. These figures are calculated on a calendar year basis, and measure current year clearances, regardless of the year in which the offense took place, as a percentage of current year
offenses. See <http://www.fbi.gov/ucr/ucrquest.htm> for more detail on UCR.
In calendar year 2007, the District’s Metropolitan Police Department achieved its goal of a 70 percent homi-
cide clearance rate, the highest of the reporting jurisdictions. The District is the only agency of the benchmarking
jurisdictions to have maintained or increased its homicide clearance rate in each of the past 5 years. This has allowed
for holding more offenders accountable for their crimes and has assisted families of homicide victims to reach clo-
sure.
Benchmarking
2-13
Arson Case Closure Rate
Note: Source of data is the International City/County Management Association (ICMA) Center for Performance Management and the Fire and Emergency Medical Services Department. For
jurisdictions other than Washington DC, the FY 2008 data is mid-year data as the final data was not available from ICMA prior to publication. Jurisdictions with no FY 2008 data shown did
not report to ICMA at mid-year. The FY 2008 data will be updated in the FY 2011 budget. Las Vegas was dropped from the report because it stopped reporting this data to ICMA.
During FY 2008, 25 percent of Washington D.C. arson cases (22 out of 86 cases) were closed with an arrest.
The ICMA FY 2007 comparison for this benchmark for cities reporting a population over 100,000 shows that, on
average, those jurisdictions closed 22 percent of their arson cases with an arrest, and that the median number was
18.7 percent. To improve the FEMS arson closure rate, the Department increased the number of full-time employ-
ees in the Fire Investigations Unit by nine. This included two shift supervisors, one canine handler and six fire
investigators. FEMS also partnered with the District’s public school system for better identification and closure of
juvenile arson cases at public schools.
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-14
Civilian Fire Deaths in Washington, DC
Source of data is the District’s Fire and Emergency Medical Service (FEMS)
An analysis of the multi-year trend in deaths caused by fire in the District of Columbia shows that even with
the decline in civilian fire deaths since FY 2005, fire continues to be a significant risk. Most civilian fire deaths
occur in residences that lack sprinkler systems and working smoke detectors. Installation of these fire protection
measures in residential occupancies dramatically reduces the risk of death by fire or fire by-products (smoke and
toxic gases). Civilian fire deaths are an extremely volatile statistic, particularly in the short-term. An individual
year's data can be skewed by a single multi-fatality incident. This statistic can nevertheless be a useful indicator
when trends are analyzed over the long-term. For the seven-year period FY 1994 to FY 2000, the District aver-
aged 13.0 civilian fire deaths annually. For the eight-year period FY 2001 to FY 2008, the District averaged 13.0
civilian fire deaths annually. Given the number of older homes and often times their close proximity to each other,
fire safety and preventive measures are paramount for public safety. Three District firefighters lost their lives due to
injuries caused by fire during the 7-year period FY 1994 to 2000, while zero District firefighters were killed per-
forming interior firefighting operations during the 7-year period FY 2001 to 2008. During FY 2008, FEMS intro-
duced a program called “Smoke Alarm Utilization and Verification” – or SAVU – utilizing neighborhood sweeps
to install smoke and/or carbon monoxide alarms in residential dwellings. During FY 2008, FEMS installed more
than 3,500 smoke alarms, most donated by manufactures at no cost to the District. FEMS particularly targeted
senior citizen households during SAVU sweeps, since 60 percent of fire fatalities in FY 2008 were senior citizens.
Benchmarking
2-15
Inmate on Inmate Assaults per 10,000 Inmate Days
Personal safety for all those involved in the criminal justice system is paramount if the system is to work efficient-
ly. Assault rates within the corrections system offer a measure of operational effectiveness in maintaining secure
and safe housing environments within the detention facility.
Note: The Department of Corrections (DOC) provided all trend data. The lower the number, the better.
Inmate on inmate assault is defined as an incident involving intentional bodily injury of an inmate by anoth-
er inmate where: (1) There is at least 1 victim; (2) The injury is severe enough to warrant more than merely first
aid, e.g. requiring sutures or setting of a broken bone; (3) The injury is such that the inmate's daily routine is dis-
rupted; and (4) The incident is validated by the inmate disciplinary process. The assault rate is measured in inci-
dents per 10,000 inmate days. To ensure consistency, the data shown is from FY 2004 as the definition of an
inmate on inmate assault was redefined in FY 2004. Inmate-days are computed as the product of the days in the
reporting period and the average daily population for the reporting period. Inmate-days are a measure of possibil-
ity for an inmate on inmate intentional contact to occur.
The inmate on inmate assault rate attained a four-year low in FY 2007, but increased substantially in FY 2008.
Factors contributing to this include better reporting of incidents than previously. The Department of Corrections
(DOC) has made a point of more thoroughly reporting assaults and distinguishing assaults from fights. Previous
assaults that were classified as fights might have under-counted the actual number. There is currently an analysis
of areas in the facility where the most assaults take place, as well as the identification of potential repeat offenders,
in order to determine the best plan of action to reduce these assaults in FY 2009. The DOC continues its efforts
to manage inmate behavior more effectively by evaluating incidents in depth and applying behavioral intervention.
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-16
Inmate on Staff Assaults per 10,000 Inmate Days
Note: The Department of Corrections (DOC) provided all trend data. The lower the number the better.
Inmate-on-staff assault rate is another measure of operational effectiveness. Inmate on staff assault is defined
as a non-accidental incident where the inmate purposely and offensively contacts an officer or other staff member
using a weapon (including fluids, body parts, sharp or blunt objects, and traditional weapons) in a manner that
results in the officer requiring immediate medical attention or the loss of a workday. Validation by the Inmate
Disciplinary process is required. The assault rate is measured in incidents per 10,000 inmate-days. Inmate-days are
computed as the product of the days in the reporting period and the average daily population for the reporting
period. Inmate days are a measure of possibility for an inmate to engage in intentional physical contact with staff.
The inmate-on-staff assault rate decreased at a steady clip through FY 2007 after reaching a peak of 1.23 in FY
2006. However, the assault rates increased again in FY 2008. This is likely due to better reporting of incidents, as
the largest contributor to the increase was non-violent cases where body fluids and other liquids were thrown. The
Department of Corrections (DOC) is also analyzing staff assaults for patterns of repeat offenders and particular
housing units. Research suggests that the incidents are confined to special management units and certain repeat
offenders, and we are currently seeking ways to remedy these incidents further. The DOC will continue to active-
ly pursue measures to reduce the inmate-on-staff assault rate.
Benchmarking
2-17
Economic Development: Jobs and Housing
This Administration recognizes that residential employment and affordable housing are critical to achieving thriving
communities. Efforts to stabilize the housing market through targeted investments and enhance a job opportuni-
ties for the traditionally underemployed are being pursued at unprecedented levels. Further, we are focusing on
removing barriers for small businesses, including ensuring that they have access to the resources they need to com-
pete and grow. Ultimately, economic development is about developing people, not just places.
In this section, the following benchmarks are presented:
1) Unemployment Rate: City
2) Unemployment Rate: Metropolitan Statistical Area
3) Commercial Office Space Vacancy Rates
4) Hotel Occupancy Rates
5) Amount of Home Assistance Loan Funds Expended Per 100,000 Population
6) Number of Home Assistance Loans Per 100,000 Population
FY 2010 Proposed Budget and Financial Plan: Special Studies
2-18
Unemployment Rate (Not Seasonally Adjusted (NSA))
The District of Columbia actively monitors the unemployment rate in the city via information gathered by the
Department of Employment Services (DOES), which is done in cooperation with the U.S. Department of Labor’s
Bureau of Labor Statistics. The mission of DOES is to foster and promote the welfare of job seekers and wage
earners by improving their working conditions, advancing opportunities for employment, helping employers find
workers, and tracking changes in employment and other national economic measurements impacting the District
of Columbia. The benchmark provides insight into the extent and characteristics of the unemployment problem
in comparison with other cities and the associated Metropolitan Statistical Area (MSA). This data, along with other
variables, assists the agency in its program and policy development.
The information below offers contrasting employment statistics for both comparison cities and comparison
Metropolitan Statistical Areas (MSAs). The unemployment rate percentages shown are for November 2008 and
represent not seasonally adjusted (NSA) data. This means that the data shown is not adjusted to account for fluc-
tuations caused by seasonal events such as holidays, weather impacts on employment, school openings/closings, etc.
These adjustments make it easier to observe the cyclical, long-term trend and other non-seasonal movements in the
series. This adjusted data becomes known as “seasonally adjusted.”
City Unemployment Rate Comparison (Not Seasonally Adjusted)
Note: The October 2007 data were revised by the Bureau of Labor Statistics and the updated data are reflected here.
Compared to other cities in the northeast, the District of Columbia has the highest unemployment rate among
the selected group followed by Baltimore, MD (8.0 percent) and Philadelphia, PA. (7.9 percent). In November
2008 within the District, approximately 27,430 individual’s − out of a workforce of 328,282 people − were actively
seeking employment. Finally, as to the District of Columbia specifically, in November 2008, the city’s NSA unem-
ployment rate was 8.4 percent. In November 2007, the unemployment rate was 5.7 percent. This represents an
increase of 2.7 percent and rising (the December 2008 preliminary NSA unemployment rate for the District of
Columbia is forecast at 8.9 percent).
Benchmarking
2-19
Metropolitan Statistical Area (MSA) Unemployment Rate Comparison
(Not Seasonally Adjusted)
Note: The October 2007 data were revised by the Bureau of Labor Statistics and the updated data are reflected here.
The general concept of a Metropolitan Statistical Area (MSA) is that of a large population nucleus, together with
adjacent communities having a high degree of social and economic integration with that core. Metropolitan areas
comprise one or more entire counties, except in New England, where cities and towns are the basic geographic
units. The metropolitan statistical area for the District of Columbia (D.C.) includes D.C. and parts of Maryland,
Virginia, and West Virginia. As the data shows, the Washington DC MSA continues to exhibit, comparatively, a
low unemployment rate, one that is below the national average. It is also an indicator of the disparity between the
surrounding area and its urban core and highlights the importance of preparing our residents for the workforce
through education and development programs, as well as forums to match District residents with hiring employers.
Finally, the Bureau of Labor Statistics reported that in 2008, 39 states and the District of Columbia posted
statistically significant unemployment rate increases, while the remaining 11 states recorded unemployment rates
that were not appreciably different from the previous year, even though some had changes that were at least as large
numerically as the significant changes.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Commercial Office Space Vacancy Rates
Date source: Delta Associates Year-End 2008 Report: The Washington/Baltimore Office Market. The rates shown are the overall vacancy rates.
The commercial property space market is an indicator of the desirability of the Washington metro area as a
place of business and an indicator of the economic climate. The year-end, overall office space vacancy rate for the
District of Columbia rose to 7.3 percent at the end of 2008, an increase from 6.4 percent at year-end in 2007.
As compared to other jurisdictions and the national average, the District’s vacancy rate for commercial buildings is
low. According to Delta Associates, the Washington D.C office market, while it has slowed down, is still strong.
However, Delta does anticipate that the office space market in the District will continue to moderate over the next
two years or so, but that Federal growth could benefit the District. Overall, the Washington metro area has one of
the lowest vacancy rates as compared to other jurisdictions and ranks better than the national average, but local
governments need to monitor office property trends and adjust revenue forecasts as conditions change.
Benchmarking
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Hotel Occupancy Rates
Source: Smith Travel Monthly Data. Data from the Washington Convention and Tourism Corporation (WCTC) based on press release dated August 27, 2008.
The travel and tourism industry continues to have a strong impact on the District economy. The Washington
Convention and Tourism Corporation (WCTC) reported that visitors spent $5.5 billion in 2007, compared to
$5.2 billion the previous year, and there was an overall increase of 7 percent in visitation. An indicator of the
District as a destination point is the occupancy rate for hotels. The above chart shows the monthly hotel
occupancy rate, starting in January 2000 through October 2008. Inserted in the chart above is a trend line, and
while it is not steep, it does show a slight increase in the hotel occupancy rate year over year. Not shown is room
supply, which according to Smith Travel, was 768,304 units in January 2000 (the first month shown above) and
823,236 units in October 2008 (the last month shown). While the room supply numbers vary month to month,
the overall trend has been an increase in supply. Thus, the District has been able to absorb additional rooms while
also increasing the room occupancy rate. As per the WCTC, the impact on District finances is estimated to be
$600 million in tax revenue in 2007. In calendar year 2007, the District averaged a hotel occupancy rate of 73.5
percent, a slight increase from the previous year’s rate of 71 percent. As an economic engine, the tour and travel
industry is important to District finances and economic vitality, as this industry provides jobs for District residents
and supports business to business sales.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Home Purchase Assistance Program For Low Income Households
The Home Purchase Assistance Program (HPAP) benchmark compares program performance to comparison juris-
dictions. Home purchase assistance loans are made for downpayment and closing costs and fill the gap between
the amount of first trust mortgage loan for which a first-time homebuyer qualifies and the total amount of funds
needed at closing for the home purchase. Low-income borrowers are first-time homebuyers whose total household
income is less than, or equal to, 80 percent of the median household income for the Washington metro area, based
on Area Median Income data reported by the U.S. Department of Housing and Urban Development (HUD).
Two benchmarks are shown below:
Amount of Home Assistance Loan Funds Expended Per 100,000 Population (in $K)
Note: Figures shown are in $1,000
Loan funds expended represent actual dollar value of loans that went to real estate settlement during the
reporting period.
Benchmarking
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Number of Home Assistance Loans Per 100,000 Population
Both benchmarks provide a context for determining how successful the District's Home Purchase Assistance
Program is in terms of marketing to low-income residents and improving their opportunities to become first-time
homebuyers. The FY 2008 data indicates that the District has been the most successful of the four jurisdictions
studied in providing homebuyer assistance loans to its residents. In FY 2006, the Department of Housing and
Community Development (DHCD) initiated sweeping changes to the Home Purchase Assistance Program, which
served to dramatically reform assistance levels relative to household income and to make the District's homebuyer
assistance programs more viable. Assistance levels were calculated to enable program participants to achieve a
"purchasing power" reflective of actual residential real estate market prices. Those changes were implemented on
July 1, 2006, and data for FY 2007 and FY 2008 reflect a dramatic increase in program effectiveness, both in terms
of loans closed, and in total loan funds disbursed. In FY 2008, a total of 500 HPAP loans were processed for first-
time homebuyers, of which 431 (totaling $25.5 million) were granted to households with incomes less than or
equal to 80% of the area median income.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Health and Human Services: A Healthy and Caring City
Our city’s poverty rate remains unacceptably high, especially when some communities have benefited from the
region’s economic book while others continue to suffer from generations of economic barriers. We will tackle this
problem by continuing a four-pronged approach to end poverty: work, opportunity, security and community. As
we address the pressing issue of poverty, we will also address the public health issues that often come with barriers
to funds and health care. The District continues to exhibit alarming rates of chronic diseases such as heart disease,
asthma, diabetes, and HIV infection. District agencies responsible for public health will continue to collaborate
across the government as well as the community to target the most pressing health issues confronting District res-
idents.
In this section, the following benchmarks are presented:
1) Poverty rate
2) Homelessness: homeless count
3) Homelessness: Rate of change in number of homeless persons
4) Homelessness: Shelter Services Recidivism Rate
5) Temporary Assistance for Needy Families (TANF) job entry rate
.
Benchmarking
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Poverty Rate
Source of data: U.S. Census Bureau American Community Survey (ACS), except in the case of the nationwide data which is derived from the U.S. Census Bureau Current Population Survey
(CPS). The poverty rate varies based on the survey used and the time period covered.
While we are pleased to see a reduction in the estimated District of Columbia poverty rate in 2007, poverty
remains high in the District of Columbia. The chart above shows the estimated poverty rates for individuals in the
District, comparison jurisdictions, and the United States. The District’s strategy to combat poverty aims to blend a
number of approaches in a portfolio of programs that will collectively assist residents in reaching greater degrees of
economic self-sufficiency. The portfolio of programs falls into two general areas. The first area consists of benefit
programs such as Temporary Assistance for Needy Families (TANF), Food Stamps, child care assistance, Medicaid,
State Health Children’s Insurance Program (SCHIP), and D.C. Healthcare Alliance, as well as various local tax
benefits such as the Earned Income Tax Credit. The second area consists of services such as tuition assistance,
vocational training, financial literacy education, and career placement. In addition, in the current fiscal year, the
District is partnering with the D.C. Office of Attorney General in aggressively reaching out to non-custodial
parents of children living in poverty, in order to address the impact of lack of child support on the family.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Homelessness
The Metropolitan Washington Council of Governments (COG) conducts a regional enumeration of the homeless
population on an annual basis. Known as the Homeless Enumeration report, it tracks both the "literally homeless"
(i.e., those without shelter or residing in temporary shelter) and the "permanently supported homeless" (i.e., those
in permanent housing, but at risk of homelessness without supportive services). The data is produced by counting
the homeless at a point in time, which for the 2008 report was conducted on January 24, 2008. According to the
COG’s “Homeless Enumeration for the Washington Metropolitan Region 2008” report, the homeless population
in the District of Columbia increased by 287, or 4.99 percent, as compared to the previous year. As compared to
2005, the 2008 regional data represents an overall increase of 3.0 percent. The charts below show a regional com-
parison. The first chart is the homeless count, and the second chart is the percent change from one year to the next.
Regional Homeless Count
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Percent Change in Homeless from One Year to the Next
The Department of Human Services (DHS) is the lead District agency for fighting homelessness.
Homelessness has been identified as DHSs’ top priority and there are major, year-round programs to serve the
homeless population in the District, and an active program to identify and implement additional transitional
housing and shelters. To this end, the extensive emergency shelter system at D.C. Village has been vacated, and an
aggressive program of placing the chronic homeless in private apartments acquired by D.C. Government, together
with supportive case management services, is underway with a goal of placing 800 homeless families over the near
term.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Shelter Services Recidivism Rate
As defined by the District, chronic homelessness or recidivism is expressed as a rate or percentage of families receiv-
ing homeless services, including centralized case managemen, that are stabilized and leave the shelter facility, but
return to the facility and case management within a twelve-month period. This benchmark is an important gauge
of the effectiveness of homeless services, especially case management, in treating root causes of homelessness and
preventing repeat episodes or chronic homelessness. Homeless services are a top priority for the Department of
Human Services and a core component of the Mayor's Homeless No More Initiative that seeks to reduce and pre-
vent homelessness in the District.
Note: This is a newer benchmark and data prior to FY 2007 is not available.
This benchmark better measures the effectiveness of case management services in preventing families from
returning to homelessness (i.e."chronically" homeless). In FY 2008, 421 families were served in temporary shelters,
of which 13 were served two or more times. The FY 2008 recidivism rate is a tremendous reduction from FY 2007.
Benchmarking
2-29
Temporary Assistance for Needy Families (TANF) Job Entry Rate
One purpose of the Temporary Assistance for Needy Families (TANF) program is to end the dependence of needy
parents on government benefits by promoting job preparation and employment.
This benchmark compares the percent of unemployed TANF adult recipients who entered employment for
the first time during the performance year. An adult is considered to have entered employment for the first time
in a calendar quarter if the adult had no earnings in any of the prior quarters of the performance year. The D.C.
rate reflects a dense urban area while other jurisdictions encompass urban, suburban, and rural communities, so a
one-to-one comparison can be problematic. The District employs an aggressive strategy to assist TANF recipients
to secure employment through contracted services, which are fully performance-based and by monitoring employ-
ment possibilities of beneficiaries so they can obtain jobs in lieu of benefits.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Infrastructure and the Environment:
Creating a Sustainable City for the 21st Century
Over the past decade, the District has done an effective job developing infrastructure to support economic growth
and the improvement of city services. We must continue to progress, while ensuring that all of our neighborhoods
have the same high-quality infrastructure and services while enjoying the benefits of healthy and sustainable growth.
We will improve public transit so that residents have better access to goods and services. We will also enhance city
services like tree planting, litter removal and recycling, which can simultaneously improve the environment and cit-
izen quality of life. We are dedicated to strengthening the connection between sustainable economic development,
infrastructure, and the environment for D.C. residents.
In this section, the following benchmarks are presented;
1) Pothole complaints per mile of roadway maintained
2) Percent of traffic signals repaired within established timelines
3) Percent of streetlights repaired within established timelines
4) Percent of roadway repaved each year
Benchmarking
2-31
Pothole Complaints Per Mile of Roadway Maintained
Note: Chicago data is an estimate.
Pothole complaints per mile of roadway maintained serves as a barometer of the condition of the roadway. As
compared to New York City and Chicago, the ratio of complaints registered with the District is low. The condi-
tions that create potholes vary by location and factors such as weather, roadway materials, usage, and terrain and
can impact the formation of potholes. In FY 2008, the District Department of Transportation responded to an
average of 8 pothole complaints a day.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Percent of Traffic Signals Repaired Within Established Timeframes
Note: The New York City management report did not have comparison data for FY 2008 however we have retained their historical data for comparison purposes.
The District’s traffic signal repair performance is on par with the comparison jurisdiction even though DDOT's
timeframes are more aggressive. The repair timeframe for New York City is 48 hours from the time of notification;
DDOT’s timeframe is 24 hours from the time of notification. The agency’s performance remains high despite the
shorter timeframe. DDOT has improved its performance in this area by focusing additional resources on service
requests, aggressively conducting preventive maintenance, and by replacing aging traffic signals and signal equip-
ment. We also continuously strive to improve our process of working collaboratively with our contractor using
automated work order and incident notification procedures.
Benchmarking
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Below is the trend for service requests for traffic signal repair for D.C. On average, 12 requests a day are made
for traffic signal repair, some of which are multiple requests for the same traffic signal.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Percent of Streetlights Repaired Within Established Timeframes
Note: The FY 2008 number for Boston is approximate, as per the City of Boston’s FY 2009 budget. The New York City management report did not have comparison data for FY 2008, however,
we have retained their historical data for comparison purposes.
The percentage of streetlights repaired within established timeframes increased in FY 2008 and is the highest
of the five comparison years. The increase is attributed to two factors. First, on June 3, 2006, a new Streetlight
Asset Management contract was initiated, and we are seeing the results of that investment. Second, in order to
improve reporting accuracy and contractor performance, the Streetlight Complaint Hot Line that went directly to
the contractor was deactivated in 2006. Currently, all calls for service are recorded in the city-wide service request
system, thus allowing for increased oversight by Department of Transportation management.
Benchmarking
2-35
The chart below shows the trend of total requests for streetlight repair, and there was a significant decrease in
FY 2008. On average, 30 requests a day are made for streetlight repair, some of which could be multiple requests
for the same streetlight.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Percent of Roadway Repaved Per Year
Note: Both Chicago and New York City did not include the percentage of roadway repaved data in their recent annual budget/management reports.
The District’s percentage of repaved highway dropped to 2.8 percent in FY 2008. However, the pothole complaints
rate (a benchmark in this section) declined and has remained low based on the comparison jurisdictions. This
might indicate that while the repaving percentage is low, the District’s streets are in overall good condition as
compared to comparison jurisdictions.
The District Department of Transportation’s (DDOT) annual roadway construction plan is based on the
Pavement Condition Assessment Survey that is completed annually for the federal highway system and every two
years for the local roads. The FY 2009 Federal survey will begin in the early summer of 2009 and will be com-
pleted by February 2010. The survey rates the District’s streets as Excellent, Good, Fair, Poor, Very Poor, and Failed.
The table below shows the ratings from the last survey. Although less than 27 percent of the local roads and 7 per-
cent of the federal roads fall into the poor, very poor, and failed category, the amount of funding required to recon-
struct or improve these roads can account for 100 percent of the DDOT’s allotted budget. More importantly, the
cost to bring the Districts roads to a condition of good or excellent requires an investment of over $580 million.
This investment does not include the annual cost to preserve the roadways once the attained level is achieved. In
recent years, DDOT has been addressing roads in very poor conditions. Additionally, DDOT is reconstructing
more roads and applying less surface treatments. These methods are longer lasting, and more expensive.
Benchmarking
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2008 Pavement Condition Assessment Survey Results
LOCAL FEDERAL
CONDITION /
LANES MILES % NETWORK LANES MILES % NETWORK
PCI RANGE
EXCELLENT
632.1 27.6% 845 41.1%
100 – 86
GOOD
618 27.0% 786.8 38.3%
85 – 71
FAIR
439.8 19.2% 294.6 14.3%
70 – 56
POOR
380.4 16.6% 109.5 5.3%
55 – 36
VERY POOR
144.3 6.3% 15.8 0.7%
35 – 21
FAILED
77.81 3.4% 2.1 0.1%
20 - 0
Note: Local highways are highways where the District repaves using locally generated revenue. Federal highways are eligible for Federal Highway Trust funding. The local highways are
surveyed every other year and the federal highways every year. In 2008, both were surveyed.
FY 2010 Proposed Budget and Financial Plan: Special Studies
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Operations:
Making our Government Responsive, Accountable, Transparent and Efficient
We understand that the strength of an organization lies to a large extent on its internal operations. Our underlying
processes must function efficiently and effectively.
In this section, the following benchmarks are presented:
1) Bond rating trend
2) Number of visits to city website
Benchmarking
2-39
General Obligation Bond Rating
The District of Columbia’s bond rating by the major rating agencies is an indictor of the overall financial health of
the District. The table below provides a summary of the credit ratings for long-term debt that are used by the
major accreditation agencies:
Investment Attributes Fitch Moody’s S&P
Highest Quality AAA Aaa AAA
High Quality AA Aa AA
Favorable Attributes A A A
Medium Quality/Adequate BBB Baa BBB
Speculative Elements BB Ba BB
Predominately Speculative B B B
Poor Standing CCC Caa CCC
Highly Speculative CC Ca CC
Lowest Rating C C C
Each rating agency uses a rating scale to reflect the risk associated with a municipality’s long-term debt.
Municipalities with a higher rating reflect a lower level of risk for default, and thus can be offered at a lower inter-
est rate and at a lower cost for the issuer. The rating agencies use evaluative criteria that include economic factors,
debt levels, the governance structure and capacity of the municipal government and fiscal/financial factors.
The table below shows the general obligation bond ratings of the District as well as comparable jurisdictions:
Standard and Poor’s
Municipality Moody’s Ratings Fitch Ratings
Ratings
District of Columbia A1 A+ A+
Baltimore Aa3 AA- A+
New York Aa3 AA AA-
San Antonio Aa1 AAA AA+
Chicago Aa3 AA- AA
Detroit Ba2 BB BB
Philadelphia Baa1 BBB BBB+
Data as of 3/2/09 Source: Rating Agency Desk
FY 2010 Proposed Budget and Financial Plan: Special Studies
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As you can see, the District has a favorable bond rating from all of the agencies. This allows the District to issue
long-term debt with terms that favor the District, which lowers the cost of the bond issuance and debt servicing.
The table below shows the historical bond ratings for the District. As you can see, the District has moved from
a junk bond rating in the early 1990’s to high A’s from all three rating agencies.
Moody's Investors
Date Range Standard and Poor's Fitch Ratings
Service
May 2007 - Present A1 A+ A+
November 2005 - May 2007 A2 (Positive Outlook) A+ A (Positive Outlook)
June 2005 - November 2005 A2 A A (Positive Outlook)
November 2004 - June 2005 A2 A A- (Positive Outlook)
April 2004 - November 2004 A2 A- A-
June 2003 - April 2004 Baa1 A- A-
March 2001 - June 2003 Baa1 BBB+ BBB+
February 2001 - March 2001 Baa3 BBB+ BBB
June 1999 - February 2001 Baa3 BBB BBB
April 1999 - June 1999 Ba1 BBB BB+
March 1998 - April 1999 Ba1 BB BB+
May 1997 - March 1998 Ba2 B BB
April 1995 - May 1997 Ba B BB
February 1995 - April 1995 Ba BBB- BB
December 1994 - February 1995 Baa A- BBB+
April 1993 - December 1994 Baa A- A-
May 1990 - April 1993 Baa A- No rating
November 1984 - May 1990 Baa A No rating
Benchmarking
2-41
Number of Visits to City Website Portal
Note: Washington, DC transitioned to using Google Analytics to measure all portal metrics in 2008. The Office of the Chief Technology Officer provided all benchmark data.
The District of Columbia government’s award-winning Internet web portal, DC.Gov, continues to
evolve to better serve the city’s constituents and ensure that the government can provide accessibility to the
people through technology. In 2008, the website recorded more than 19 million visits, which is greater
than website visits to similarly sized municipalities. The table below captures the percent change from
Calendar Year 2007 to Calendar Year 2008:
DC Goal: 10% Increase 2007 2008 % Change
Washington, DC 16,250,569 19,101,184 17.5%
Montgomery County, MD 18,248,572 19,184,684 5.1%
Tampa, FL 5,164,777 5,220,763 1.1%
Boston, MA 10,133,133 8,507,616 -16.0%
The District was able to meet its goal of at least 10 percent growth as measured by the number of visits to the
portal.
Keeping the needs of its users at the forefront of the portal’s design and functionality, DC.Gov works to meet
one of the broadest requirements for user accessibility for any municipal web portal in the United States. The
portal’s user base includes an array of stakeholders:
FY 2010 Proposed Budget and Financial Plan: Special Studies
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• A growing, diverse residency;
• Weekday commuters from neighboring states;
• Tourists from around the world; and
• The federal government and its security and emergency contingencies.
To meet all the needs unique to diverse users, DC.Gov serves as a single point of entry for all of its customers
to take advantage of online services, news and information. It also interacts with the Mayor and other DC
residents.
DC.Gov continues to improve service delivery and increase transparency of government operations by adding
new online applications and publishing more data and information. In 2008, DC.Gov began to publish
procurement pre-bid conferences through YouTube and utilize wikis to publish content in real-time. In addition,
DC.Gov expanded its data catalog and now publishes over 250+ data feeds in multiple data formats, providing
residents a single point of access to mash-up ready content. The data feeds have created a new model for govern-
ment that views the public as a partner, encouraging collaboration and digital democracy. We encourage you to
visit http://digitalpublicsquare.dc.gov.
DC.Gov was also recognized for many of its achievements in 2008 including: its Certified Business Enterprise
Resource Center in the Government to Business Category (National Association of Chief Information Officers
Recognition Award); Procurement Wiki (Government Computer News Outstanding Information Technology
Achievement in Government Honorable Mention Award); DC’s CapStat: Building A City That Works Website in
the web and e-government services category (Public Technology Institute Significant Achievement Award); and for
DC’s Public Snow Response Reporting System in the Geographic Information Systems (GIS) category (Public
Technology Institute Significant Achievement Award).
Benchmarking
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Fixed Costs
Fixed Costs
The term "fixed costs" is a misnomer. Services are rent for privately owned facilities, mail processing
fixed but the cost of such services is variable. Fixed and delivery, and steam heat.
costs are expenses that do not change in proportion to
the activity of a business, and are related to the every- 2. The Office of the Chief Technology Officer
day functioning of a business. In the District, fixed (OCTO) estimates costs for telecommunication
costs are categorized as electricity, heating fuel, janito- services and provides guidelines to agencies for
rial services, natural gas, occupancy, telecom, rent, managing their telecommunication services.
security services, steam, water and sewer, and fleet fuel Telecommunication services include voice and
and services. While the expense item is fixed, the costs data lines, circuits, mobile phones, pagers, per-
do have variability. Rate fluctuations and consump- sonal digital assistants (PDAs), and other com-
tion levels play a large part in determining the amount munication equipment.
of fixed costs. However, over the long-term, fixed
costs typically grow with inflation and are governed 3. The Department of Public Works (DPW) esti-
by uncontrollable and unforeseen forces (weather, mates costs for fleet fuel and fleet services includ-
deregulation of rates and changes in political policies, ing maintenance and leasing. DPW has an agree-
for example) that underscore the challenges to ment with OPM to purchase fuel through a
District agencies in developing fixed cost estimates. Government Services Administration (GSA) con-
tract. DPW acts as its own paying agent for fleet.
Management of Fixed Costs
Centralized management of the District's fixed costs 4. The Office of Finance and Resource
began with the breakup of the Department of Management (OFRM) is responsible for the cen-
Administrative Services under the Revitalization Act tral payment of most fixed costs. OFRM makes
of 1997. Today, four agencies develop and manage payments and serves as liaison between OPM,
the forecast and review and pay the invoices for fixed OCTO, and the agencies that incur the fixed
costs: costs. OFRM pays 96 percent of the District's
1. The Office of Property Management (OPM) centrally managed fixed costs; the remaining 4
works with the District's real estate operations, percent is managed and paid by DPW.
facility management, and protective services, to
develop estimates for rent/occupancy, utilities, Two other agencies -- the Office of Financial
security, and janitorial costs. OPM provides esti- Operations and Systems (OFOS) and the Office of
mates for: electricity, which includes lighting and Budget and Planning (OBP) -- play key roles in the
electrical power, natural gas for heating, armed accounting and monitoring of fixed costs. OFOS
and unarmed security officers, daily trash ensures that proper financial controls are implement-
removal, office cleaning, landscaping, water and ed by the agencies, while OBP assists agencies in
sewage, maintenance of District-owned facilities, including their fixed cost estimates in their annual
budgets.
Fixed Costs
3-1
Outlook mulation is a very stable process; however, timing dif-
Fixed cost estimates for FY 2009 and FY 2010 are ferences between the budget formulation and fixed
$300.3 million and $292.5 million, respectively cost estimation processes account for a large part of
(Figure 3-1 and Table 3-1). Electricity is expected to the difference between what goes into the budget and
be the fastest growing component (Figure 3-2). what is required once the fiscal year actually begins.
Market forces have played a dominant role and affect- The rates and assumptions used in setting fixed
ed the District's ability to develop accurate estimates costs for District agencies are done by commodity;
for some of its fixed costs. However, timing remains a not necessarily by agency. For example, multiple
large factor in the development and accuracy of esti- agencies occupying one leased facility share the cost of
mates for some fixed costs, often leading to spending that facility based upon square footage used. The
pressures in agency budgets. greater the number of agency occupants, the less the
Given that the District must develop its forecast at rental cost for each occupant agency. However, this
least a year before agencies execute their budgets, also works in reverse. The lesser the number of agency
assumptions must be made about the factors that will occupants the more the rental cost for each occupant
affect the estimates. Due to the deadline for the agency. In this example, an agency’s rent may fluctu-
District’s budget submission to Congress, budget for- ate with no change in the agency’s occupied space.
Figure 3-1
Growth of Fixed Costs FY 2003 to FY 2009
FY 2010 Proposed Budget and Financial Plan: Special Studies
3-2
Table 3-1
Growth of Fixed Costs by Commodity FY 2006 to FY 2010
Figure 3-2
Commodity Comparison
Year over Year Growth
Fixed Costs
3-3
Commodity Definitions, Rates, and (SPO), who have the ability to arrest and detain vio-
Assumptions lators, regardless of whether they are armed or
unarmed; and Security Officers (S/O, or S/G), who
Rent do not have the ability to arrest, but do possess the
Rent is cost generated from leasing non-D.C. necessary training to minimize security risks.
Government owned buildings. Rent is comprised of These two types of contract security officers are
four individual components: Base Rent, Operating billed at two different rates. The SPO rate is the same
Expenses (which includes Common Area whether he or she is armed or unarmed. PSPD dis-
Maintenance), Real Estate Tax, and Parking. Each tinguishes the use of unarmed SPOs in its assessment
one of these four charges is unique to the terms and where other risk factors become involved. PSPD
conditions of the lease agreement with the Landlord. therefore manages the contract security officers as a
The base rent is clearly stated in the Lease agreement component of its patrol operations.
as to what amount it will be over the term of the The electronic access control/security systems
Lease. portion of security refers to the costs associated with
Operating expenses, real estate tax, and parking security cards, surveillance cameras, and electronic
fluctuate. They can be fixed at a flat rate increasing alarm systems.
year over year, or be included in base rent, or costs can The final component to security costs involves all
be dependent upon actual expenses invoiced by the of the equipment (metal detectors, x-ray machines,
Landlord and subject to change annually. related maintenance, etc.), training of officers and the
For purposes of the FY 2010 fixed cost budget, all supplies (uniforms, office artillery, etc.) used to
four categories of rent are defined by the Lease agree- accomplish the mission.
ment as mentioned above. If the building is leased The FY 2010 security budget is built around the
by one agency, that agency bears the burden of the four security elements mentioned above. Hawk One
cost. If the building is occupied by multiple agencies, is the security contractor used by the District. The
the cost for all four categories are prorated on an occu- amount of contract security used is measured in man-
pied area to all agencies’ occupying that building. hours, based on the two different rates for SPOs and
Each agency is charged a prorated share of the S/Os. Another element of the security budget mea-
expense. Parking is usually an agreed upon rate by sures the cost PSPD incurs in supervising and provid-
parking space. ing supplemental security service to the buildings cov-
ered by Hawk One as well as buildings covered solely
Security by PSPD. Another element is assigning costs for
Security service is defined as all components that con- training equipment and supplies, such that every
tribute to the protection and law enforcement at building receiving either a Hawk One guard or ser-
District-owned and leased properties. The cost to vices of a PSPD officer is assessed a prorated amount
accomplish this mission is broken down into four ele- for training, which going forward is equivalent to the
ments: patrol operations, contract security guard training standards, equipment and supply costs of
management, electronic access control/security sys- MPD. The final element is comprised of the equip-
tems, and equipment, training and supplies. ment expense associated with each building that uses
The Protective Services Police Department security services. Only agencies that use ADT securi-
(PSPD) performs patrol operations, which include, ty services are assessed this element of security cost.
among other things, daily physical observation, track- In all cases where a building is owned/occupied by
ing, and recording of all activities impacting the secu- multiple tenants, the costs associated with the proper-
rity of District assets. ty are prorated according to occupancy.
Frequently, the PSPD utilizes the services of con-
tract security guards. The use of these guards is deter-
mined through an assessment completed by the
PSPD and input from the District agencies occupy-
ing the various properties. There are two specific
types of contract guards: Special Police Officers
FY 2010 Proposed Budget and Financial Plan: Special Studies
3-4
Occupancy rated across agencies, based upon occupied space, for
Occupancy fixed costs are associated with DC owned those agencies that share building space.
buildings. These are the costs that it takes to keep the
building operational and are comprised of: Elevator Natural Gas
maintenance, Fire alarm, Landscape, Air quality, Pest Natural gas is provided by both a third-party supplier
control, HVAC, Electrical repairs, Repairs and main- and the local distribution company. The third-party
tenance, water treatment, and salary expense. supplier provides the commodity and transports it to
Some of these costs are determined by contracts the city limits before it is supplied to District build-
with third party providers, such as Elevator and ings by the local distribution company. The District
HVAC. Other costs are determined by the needs of uses in excess of 16 million therms of natural gas
the building as well as historical actual spending annually.
Occupancy costs for the categories above vary by The natural gas estimates are based upon three-
the needs of the building. For example, some build- year historic usage and expenditure profiles as well as
ings may not have elevators while other buildings may contractual obligations that are in place for the supply
have a larger lawn area and require more landscaping. of the commodity. Also included in the analysis to
Those needs are then totaled for the entire building. provide the estimates are prospective agency moves
Each agency occupying the building receives a prorat- and changes in the amount and types of accounts
ed expense according to the amount of space occu- being serviced. Agencies that share space in a given
pied. District government building are charged a prorated
share of the cost for natural gas in proportion to the
Janitorial space the agency occupies.
Janitorial cost are comprised of trash removal and
cleaning services. These two functions are provided by Water and Sewer
four contractors: TAC, MOTIR, R&R, and Bates. Water and sewer services to District facilities and
There costs are predetermined by a contract that pro- other water consuming elements are bundled and
vides for basic cleaning and trash removal. provided by a single company. The local water and
Janitorial costs are determined by reviewing the sewer authority is responsible for all functions per-
base contract as well as an entire year of historical taining to the acquisition and distribution of the com-
invoices. Review of the prior year invoices ensures modity. Annually, approximately 935 million gallons
that new contract costs are reasonable. Like security of water are consumed in District government build-
and occupancy, janitorial costs are prorated among ings.
the agencies using the service. The estimates for water and sewer are also derived
using a three-year profile of historic expenditures and
Electricity consumption coupled with anticipated service
The District of Columbia purchases in excess of 400 charges from the utility company as well as anticipat-
million kwh of electricity annually. The electricity is ed changes in consumption. Water and sewer costs are
purchased from a third-party supplier and the local prorated according to agency space occupied.
distribution company. The third-party supplier pro-
vides transmission and generation, and the local com- Heating Fuel
pany distributes the electricity. The District purchases fuel to heat facilities and fuel
Estimates for electricity are derived from an exam- generators.
ination of the expenditures and consumption levels Fuel estimates are based upon the past year’s usage
across all agencies and other elements of electric usage and expenditure profile since fuel prices are subject to
over a three-year period. Historic usage, coupled with change on a daily basis. These costs are prorated
anticipated growth or decline in usage based upon among agencies who use these types of fuel services.
future District plans, is also taken into consideration,
as well as anticipated agency moves. Associated elec-
tric costs are paid by the agency in question where the
building is occupied by a single agency. Costs are pro-
Fixed Costs
3-5
Steam vehicle/equipment type as well as anticipated increas-
Steam is used in four District government buildings es to fuel due to market fluctuations.
for heating purposes. Steam is a bundled commodity Scheduled Fleet Maintenance performs preven-
being provided by a single provider. tive maintenance actions, including changing oil and
The estimates for steam are also derived using a filters; checks tires, engines, batteries, and transmis-
profile over a three-year period of expenditures and sions; and prepares vehicles for their seasonal and
consumption as well as expected service charges from year-round duties (alley cleaning, snow removal, leaf
the service provider and anticipated changes in the collection, pothole repair, etc). Parts and fluids are
configuration of the District buildings that use steam. provided as part of this service.
These costs are prorated among agencies which occu- Unscheduled Vehicle and Equipment Repairs
py space in four District government buildings. tows inoperable vehicles, diagnoses why vehicles are
not operating properly, and makes the necessary
Telecommunications repairs or transfers vehicles to vendor for return to ser-
Telecommunications is comprised of a comprehen- vice
sive set of systems, networks and technical platforms Vehicle and Equipment Acquisitions consults
used by the District for all of its telephony, internet with all District government agencies about vehicle
and data related services. The Office of the Chief needs, ensures that these agencies have sufficient bud-
Technology Officer (OCTO) was created in FY 1998 get authority to meet their needs, procures vehicles,
to centralize the development and coordination of and reduces unnecessary vehicles from the fleet.
information technology and telecommunications sys-
tems for the entire District. OCTO is responsible for Postage
the design, implementation, maintenance and the Beginning in FY 2010, postage will no longer be a
upgrade of the entire technology platform supporting commodity for centralized fixed costs. The Office of
the District government. A critical part of the over- Property Management will assume financial responsi-
arching goal of OCTO is to develop a technology bility for postage and will no longer have an intra-
infrastructure that provides maximum flexibility, District relationship to support this expense.
functionality and connectivity at the best price.
The telecommunications platform can be divided Conclusion
into four main offerings: land lines; wireless services Controlling fixed costs is an important way to con-
and devices; data services; and other telephony ven- serve funds so that other, more necessary services can
dors and suppliers. be delivered to District residents without increasing
The total forecasted amount for telecommunica- taxes. The District would benefit from the develop-
tions adds the total for the four categories of telecom- ment of a rental policy that provides a strategy for cost
munications, based on the prior year spend rate, and containment and utilization that coordinates with the
the amount of money agencies forecast for new District’s capital program. Also, implementation of a
spending. District-wide utility conservation plan would help
defer the impact of electrical rate increases. Efforts
Fleet toward these savings and conservation measures are
Fleet management is comprised of Fleet Fuel, under way throughout the District. Market-driven
Scheduled Fleet Maintenance, Unscheduled Vehicle deviations from cost estimates always will occur, but
and Equipment Repairs, and Vehicle and Equipment the District's mission is to minimize their impact by
Acquisitions. first providing well-based estimates, then delivering
The Department of Public Works, Fleet the service with maximum efficiency and minimum
Management Administration, provides fuel to 42 waste.
agencies citywide. Fleet Management is responsible
for all functions including maintenance of 11 fuel
sites throughout the District. The estimates for fuel
are calculated from the previous year consumption by
FY 2010 Proposed Budget and Financial Plan: Special Studies
3-6
Pilot Study -
Performance Plan
for Capital
Improvements
Program
Pilot Study - Performance
Plan for Capital Improvements Program
Introduction
The Office of Planning with support from the Office of the City Administrator is coordinating a multi-agency
initiative that is exploring the application of shared performance measures across agency lines in order to better serve
our neighborhoods. Through this special study, each agency involved has created individual and shared
performance measures that will gauge changes in neighborhoods and quality of life for area stakeholders and will
collaborate to create viable, sustainable communities.
Performance measurement is the essential element of results-oriented management. This project links govern-
ment investment to outcomes in communities around environmental, economic and public safety issues.
The District of Columbia’s Capital Improvements Plan (CIP) Budget is a 6-year roadmap for how public
improvements and investment decisions are made and prioritized. More specifically, the CIP guides the develop-
ment of the District by:
■ Establishing priorities among projects so that limited resources are used to the best advantage;
■ Building facilities that support the District stakeholders' objectives;
■ Supporting the physical development objectives incorporated in approved plans, especially the Comprehensive
Plan;
■ Assuring the availability of public improvements; and
■ Providing site opportunities to accommodate and attract private development consistent with approved devel-
opment objectives.
In FY 2001, the District Council passed legislation (D.C. Code §47-308.01) requiring the Mayor’s budget to
be based upon performance measures. So-called “Performance-Based Budgeting” links government spending to
the outcomes of programs, projects, and activities, thus allowing actual results to be measured against established
benchmarks of success. While performance measures are not typically associated with CIP projects, the CIP must
continually prioritize and evaluate public improvements. However, measuring the impact of capital investments
may provide the District government a more accurate picture of the positive change taking place in neighborhoods,
especially in areas that are still lagging behind in revitalization.
The Watts Branch Stream Valley CIP Pilot Project is a multi-agency effort to coordinate neighborhood invest-
ment and demonstrate how sustained investment in a designated geographic area (in this case, environmental
restoration of the park and stream valley) can result in specific outcomes related to improved health and econom-
ic well-being in the community.
Performance Plan
The study area encompasses the entire Watts Branch Stream Valley and the adjacent neighborhoods in Upper
Northeast Washington. The boundaries are primarily formed by East Capitol, Dix and 57th, Blaine and Brooks
Streets to the south; Hunt Place and Minnesota Avenue to the west; Nannie Helen Burroughs to Hayes, Foote and
Dix Streets to the north; and Southern Avenue to the east (see map).
Pilot Study - Performance Plan for Capital Improvements Program
4-1
The Office of Planning, serving as the coordinating agency, worked with the partner agencies to formulate
overall goals and specific shared performance measures for this pilot project. By linking agencies responsible for
parks and recreation, environment quality, public safety, transportation, planning, water and sewer, schools, eco-
nomic development and housing, our aim is to create a sustained and coordinated effort to ensure that the public
investment taking place in this specific geography within the District delivers real improvements to citizens and
neighborhoods. Working jointly, the partner agencies hope to show a critical mass of investment in the stream
valley that will provide:
■ Enhanced transportation access to the stream valley, with greater use of paths, trails, and other transportation alterna-
tives;
■ Increased public safety;
■ Revitalized urban parks and recreation opportunities;
■ Improved water quality;
■ Restored ecological integrity of the stream valley; and
■ Additional economic development, including improved employment, housing and retail options.
The shared performance measures created for this pilot project focus on five categories: environment, park usage,
public safety, community involvement and workforce/economic development. The table below identifies the
SHARED PERFORMANCE MEASURES
Performance Category Shared Measures Responsible Agencies
Environment ■ Reduce illegal bulk trash dumping and aban- DPW, DPR, MPD, DCRA
doned autos by 50% in three years
■ Implement low impact development techniques DPR, DDOT, DCPS, DDOE
to reduce average sediment in stream (TSS) by
35% over the next 3 years
■ Reduce sediment in stream (TSS) by 35% by DDOE
restoring 1.9 miles of Watts Branch stream
■ Create fishable, wadeable stream in five years DPR, DDOE
■ Complete all park capital improvements for DPR, DMPED
phase 1 within 2 years
■ Reduce the number of vacant housing units DCRA , DHCD
along the stream valley by 15% annually over
the next 3 years
■ Acquire certain properties encroaching the OPM, DMPED, DPR
stream valley by 2010
Park Usage ■ Increase programs available for youth in the DPR, DCPS,
Park by 20% annually over the next 3 years
■ Increase programs available for seniors in the DPR
Park by 20% annually over the next 3 year
(Continued)
FY 2010 Proposed Budget and Financial Plan - Special Studies
4-2
SHARED PERFORMANCE MEASURES (Continued)
Performance Category Shared Measures Responsible Agencies
Park Usage ■ Increase access to park via bike trails by 25% DDOT, DPR
over the next 3 years
Public Safety ■ Reduce crime throughout the stream valley by DPR, MPD
8% annually over the next 3 years
Community Involvement
■ Increase the number of resident volunteers, DPR, WPP
especially youth, participating in activities such
as tree plantings and park clean-up by 10%
annually over the next 3 years
Workforce/Economic ■ Provide training in green-collar occupations for DOES, OP, DCPS, DPR
Development 100 youth and adults over the next 3 years
shared performance measures and the responsible agencies for each measure.
Baseline information for each performance measure has been collected from the participating agencies and will
be used to assess the level of achievement for each performance measure. Agencies will submit regular bi-month-
ly reports on their activities regarding the performance measures and their progress toward reaching those goals.
Achieving these shared performance measures is dependent upon inter-agency collaboration and cooperation. As
such, agencies will also participate in roundtable meetings twice a quarter, thereby fostering communication
between the agencies.
Community Outreach
In June 2008, the Office of Planning coordinated the Marvin Gaye Park Festival to help inform the community
about the various plans and public investment slated for the stream valley. The Marvin Gaye Park Festival provided
an opportunity for interested stakeholders to interact with partner agencies and gain greater insight into how these
public investments will impact the stream valley. All DC Government partner agencies and over a dozen non-prof-
it organizations participated. An estimated 500 residents visited the various agency and community exhibits and
enjoyed lively music and dancing as well as arts and crafts vending.
Community involvement is a major component of this pilot project. Area residents and other stakeholders pro-
vide an added measure of accountability and their support is vital to the success of agency efforts. Agencies will
reach out to major community-based partners such as the Watts Branch Alliance, the Advisory Neighborhood
Commissions and the various civic associations along the stream valley to inform them of upcoming improvements
and also seek their involvement in community-based activities such as cultural events and clean-up projects. Other
not-for-profit stakeholders, such as Habitat for Humanity, and local churches will also be part of the outreach
efforts. The Office of Planning, in coordination with the Office of the Deputy Mayor for Planning and Economic
Development, the Department of Parks and Recreation and other agencies, including the District Department of
Transportation, the District Department of the Environment, and the Office of Public Education Facilities
Management, will be returning to the community to inform residents of the status of the first round of public
improvements to the Stream Valley Study area. These sessions will allow area stakeholders to get updates on pro-
jects of interest and timetables for completion.
Pilot Study - Performance Plan for Capital Improvements Program
4-3
Moving Forward
Over the course of the remainder of FY 2009, the Office of Planning will receive regular reports from the partner
agencies in order to chart their progress against shared performance measures. Each agency is responsible for cre-
ating interim tasks that will aid in achieving the shared measures and for providing accurate data. Realistic bench-
marks and deadlines will be set in accordance with all District regulations and agency performance goals. The final
results for FY 2009, the first year of monitoring, will then be reported to the Office of the City Administrator and
will be the basis of Part III of this Special Study, to be contained within the Special Studies Volume of the Mayor’s
proposed budget for FY 2011.
FY 2010 Capital Improvements: Watts Branch
This year, the emphasis will be on three strategic areas – park improvements, environmental restoration, and blight
elimination. These three areas are significant and impact the overall health, safety and public welfare of the residents
within the Watts Branch study area.
Several major capital improvements are either underway or will commence in 2009. These improvements
represent over $130 million of committed investments from 6 agencies: The Office of the Deputy Mayor for
Planning and Economic Development/Department of Parks and Recreation (DMPED/DPR), District
Department of Transportation (DDOT), DC Water and Sewer Authority (WASA), District Department of the
Environment (DDOE), and Office of Public Education Facilities Modernization (OPEFM). The most significant
investment comes from the demolition and reconstruction of H.D. Woodson High School, located at 5500 Eads
Street. OPEFM will construct a state-of-the-art facility that replaces the edifice known throughout Washington as
the “Tower of Power.” The facility is expected to obtain the highest Leadership in Energy and Environmental
Design (LEED) “Platinum” certification for green building development. Upon its re-opening in the fall of 2010,
WATTS BRANCH CAPITAL IMPROVEMENT PROJECTS AND INVESTMENTS – 2008-2010
Agency Project Cost Status
DMPED/DPR Phase I Park Improvements – $4,000,000 Design and Construction Plans
Marvin Gaye Park Completed; RFP out for bid,
construction begins in Summer
2009
DDOT Bike Trail Improvements $3,100,000 Construction is approximately 90%
complete – Spring 2009 anticipated
opening.
Design and Construction Plans
Nannie Helen Burroughs $11,000,000 Completed; Contractor selected,
Streetscape Project
work to commence in Summer
2009
DDOE Watts Branch Stream $4,500,000 Plans are complete – awaiting
Restoration permit approval by FEMA and EPA.
Construction to begin late fall 2009
OPEFM HD Woodson High School $109,000,000 Construction underway –
Reconstruction estimated completion late Fall 2010
WASA Sewer and Water Line Repair $2,200,000 First phase of repairs complete –
other replacements underway
TOTAL INVESTMENT $133,800,000
FY 2010 Proposed Budget and Financial Plan - Special Studies
4-4
the new building will serve a new academic mission with the placement of the Science, Technology, Engineering
and Mathematics (STEM) curriculum at Woodson. Details of other capital improvements are listed in the table
for this section.
FY 2009 Marvin Gaye Park Improvements
The Office of the Deputy Mayor for Planning and Economic Development in coordination with the Department
of Parks and Recreation is responsible for the implementation of the first phase of improvements at Marvin Gaye
Park. Four individual nodes were identified for the creation of the linear park.
1) The Capitol Gateway Node is the location of the boyhood home of Marvin Gaye at the eastern
end of the park and contains the Watts Branch Recreation Center and playing fields.
2) The Heritage Green Node at the intersection of Foote and Division Avenues will include the
Amphitheater, play areas, meditation gardens and an environmental monitoring station.
3) The Lederer Center and MLK, Jr. Memorial Node occupies land between 48th and 49th
Streets NE on Nannie Helen Burroughs Avenue NE. Future improvement projects include
transformation of the old vehicular bridge into a new “green bridge”, community gardens,
outdoor classrooms and the Lederer Center with education court and garden market area.
4) At the western end of the campus is the Lady Bird Johnson Meadows Node between Minnesota
Avenue NE and Nannie Helen Burroughs Avenue NE.
FY 2009 MARVIN GAYE PARK IMPROVEMENTS – PHASE ONE
Node Project Area Planned Improvements
Heritage Green Division and Foote Streets Entry ■ seating
■ special paving
■ plantings
■ completion of bike trail (adjacent)
Playground ■ park identification
■ play equipment
■ seating
■ planting
Community Stage ■ trail completion
■ walk connections
■ seating
■ lighting
■ art opportunity (by others)
Lady Bird Johnson Meadows Lady Bird Johnson North ■ park entrance/trail head
■ trail completion
■ park identification (mosaic art work)
■ bass clef seating area
■ library plaza
■ Low Impact Design
■ woodland garden
■ planting
■ sidewalk north side of Hunt Place
Hunt Place Bridge ■ narrow street, new curb and gutter
■ replace wood/cable guardrail with walls,
lighting and banners
■ stream overlook
■ special paving at cross walks
Grant Place Entry ■ park identification
■ special paving
■ planting
Pilot Study - Performance Plan for Capital Improvements Program
4-5
There are two nodes within the park identified for the first phase of improvements: Heritage Green and Lady
Bird Johnson Meadows. Please see the table titled “FY 2009 Marvin Gaye Park Improvement - Phase One. It is
estimated that these improvements will be implemented at a cost of $4 million. DMPED is currently submitting
the project for bid and it is anticipated construction will begin late spring/early summer of 2009.
Environmental Restoration
Environmental restoration of the Watts Branch Stream Valley is a central part of this pilot project. Watts Branch
is the longest city park and creek in Washington and has a rich history in urban environmental reclamation. In
1966, Lady Bird Johnson recruited landscape architect Ian McHarg and philanthropist Laurence S. Rockefeller to
help revive the linear park adjoining Watts Creek, which launched the urban component of the Johnson
Administration's “Keep America Beautiful” initiative. Today, efforts led by the District Department of the
Environment in coordination with the District Department of Transportation and the Department of Parks and
Recreation will restore nearly two miles of the stream through the reduction of sediment in the stream bed. DDOE
has completed plans for stream restoration and is awaiting permit clearances from FEMA to begin restoration.
Numerous abandoned structures and vacant parcels are scattered throughout the study area and continue as
eyesores to the community. Inspectors and managers at the District Department of Public Works and the
Department of Consumer and Regulatory Affairs are working to eradicate blight in the study area. Through the
use of existing municipal regulations, both agencies will ensure property owners are complying with registration
requirements for vacant and abandoned properties, complete any required site improvements, assure building code
compliance and if necessary levy fines against neglectful owners.
In conjuction with the code compliance efforts, the Office of Property Management and the Department of
Housing and Community Development will work together to appraise targeted blighted properties and make
friendly acquisitions.
Community Development
Shared performance measures in other categories will continue to be monitored throughout the span of the pilot
project. However, FY 2011, the third year of the pilot project, will focus primarily on economic development.
Economic development activity is helping to reshape the neighborhoods within the study area and public invest-
ment in park improvements along with infrastructure upgrades help support economic revitalization. Affordable
housing and commercial corridor revitalization help to complete the transformation of the Watts Branch Study
Area. Projects such as Lincoln Heights New Communities and the Capitol Gateway HOPE VI are transforming
public housing and creating new mixed use communities that are available to persons of varying income levels and
housing tenure.
The Nannie Helen Burroughs Avenue NE Corridor has been targeted for commercial development through
the Great Streets program with pending redevelopment of the Strand Theater and implementation of new
streetscape.
Now more than ever, job training and employment is essential to the transformation of the neighborhoods
within the stream valley area. The Department of Employment Services will continue its efforts to enlist unem-
ployed and underemployed residents for opportunities such as green collar job training and placement.
This pilot program will demonstrate how a specific neighborhood area can experience synergistic economic and
environmental revitalization through targeted capital investment while promoting sustainability, safety and even
sanctuary in the midst of an urban landscape.
FY 2010 Proposed Budget and Financial Plan - Special Studies
4-6
Pilot Study - Performance Plan for Capital Improvements Program
4-7
Financing
Economic
Development
Financing Economic
Development in the District of
Columbia
The District’s economic vitality is fueled by many forces, which in turn reinforce other factors such as a robust labor
market, rising real estate values, and enhanced government resources. Targeted economic development policy also plays
a role, as the District invests public funds to encourage further economic growth. While the current financial turmoil
is having a profound effect on planned development, targeted public investments remain critical for successful economic
development.
This chapter describes the District’s policies and methods for financing economic development. It includes:
■ Broad public policy goals for economic development;
■ Descriptions of various methods for financing economic development; and
■ A summary of District programs and the District’s investments in them.
Economic Development and Public Policy
The District encourages economic development in order to improve the overall quality of life for its residents by pro-
viding affordable housing opportunities, diverse retail and entertainment options, and a greater number of better jobs.
Economic development also increases and broadens the city’s tax base, bringing in revenue that can pay for addition-
al government services or targeted tax relief to encourage further growth.
Housing —To expand housing opportunities for residents, and to assure a significant amount of new housing units
are affordable to low and moderate income working families, the District supports mixed-use and mixed-income
developments.
Retail — To address the lack of retail shopping in many neighborhoods, the District supports a wide range of retail
projects, and emphasizes first floor retail in the mixed use commercial and residential projects it supports. Specific
efforts have focused on encouraging unique retail in the Downtown area and big-box retailers, modern grocery
stores and neighborhood-serving retail in older, traditional business districts.
Entertainment — By supporting entertainment venues, the District supports both tourism and night life, both of which
enhance the attractiveness of the District as a place to live, work, and visit. Through economic development subsidies,
the District has supported the multi-purpose Verizon Center, theaters (e.g., Shakespeare Theater, Arena Stage, Lincoln
Theater, Howard Theater, Atlas Theater, Source Theater, and Studio Theater), a new Major League Baseball stadium, and
several museums and arts/entertainment districts.
Jobs — To increase the number of jobs available in the District and to address the discrepancy between employment
in DC and employment of District residents, the District emphasizes job creation in its decisions to subsidize devel-
opment projects.
Financing Economic Development
5-1
Methods for Financing Economic Development
The District uses a variety of economic development financing tools that can be broadly categorized into three
major categories:
■ direct investment, such as investment in public infrastructure, or granting funds or property for development;
■ tax policy, such as tax abatement or use of tax revenue to repay debt incurred for specific projects; and
■ information and regulation, such as outreach and zoning relief.
The District has also created independent economic development authorities to spur development, although
recently two such entities were disolved and duties assumed by the Office of the Deputy Mayor for Planning and
Economic Development.
Direct Investment
Infrastructure improvements — Using public funds to make improvements of the public areas (e.g. roads and
bridges, sidewalks, lighting, utility upgrades, parks and landscaping) around economic development projects can
make a development more marketable and reduce its overall cost. Often these types of investment are financed
through the District’s capital budget or partial federal government support. Examples include the following pivotal
investments:
■ U Street: Frank D. Reeves Municipal Center and the Lincoln Theater;
■ NOMA (“North of Massachusetts Avenue”): New York Avenue Metrorail Station;
■ East Washington: District government office buildings at Anacostia Gateway and Minnesota/Benning
MetroRail station; and
■ Capitol Hill: Model streetscape improvements to Barracks Row, the District’s oldest commercial corridor.
Grants — Providing grants is the most direct and most efficient form of District subsidy for private development
activity. Cash grants are a one-time direct budget outlay and have the highest immediate fiscal impact on the bud-
get. Therefore, they must be considered carefully alongside competing budgetary needs. Direct subsidies are less fre-
quently used when the District’s revenues decrease during recessionary times.
Land — Donation of city-owned land or buildings, or executing a no-cost or low-cost long term ground lease of
District-owned property, greatly reduces a project’s development costs. These mechanisms do not have a fiscal
impact on the District’s budget and financial plan, but do reduce the overall value of the District’s assets.
Equity — Similar to a grant, the District could contribute funds directly to a project, and then take an equity posi-
tion and earn a return just as a private equity provider would, or earn a negotiated return if a project performs bet-
ter than expected. An equity investment structure would have to meet regulatory and fiduciary requirements.
Forgiveable and low-interest loans — This type of investment includes subordinated government loans, without
collateral, that can be forgiven if certain benchmarks are met (e.g. creating affordable housing, LSDBE participa-
tion). The District’s Department of Housing and Community Development has used federal Community
Development Block Grant funds for this purpose. In addition, loans are made through the Housing Production
Trust Fund.
Tax Policy
Tax Revenue
Dedicated taxes fund the Neighborhood Investment Fund (NIF) and the Housing Production Trust Fund. The NIF
program uses an annual, non-lapsing fund to finance economic development and neighborhood revitalization in
FY 2010 Proposed Budget and Financial Plan: Special Studies
5-2
12 targeted areas of the District. The fund is capitalized by an annual contribution of 15 percent of the personal
property tax, annually not to exceed $10 million. The target areas span all four quadrants of the District and stretch
across both sides of the Anacostia River. They include Brightwood and Upper Georgia Avenue, Columbia Heights,
Brookland and Edgewood, Bloomingdale and Eckington, Logan Circle, Shaw, H Street NE, Deanwood Heights,
Anacostia, Congress Heights, Bellevue, and Washington Highlands. NIF grants are intended to spur small com-
munity efforts and improve the quality of life of each neighborhood through civic action and resident involvement.
By implementing and administering the NIF programs, the target area residents are poised to receive valuable
investments in projects and activities supporting cultural, historical, social, commercial, recreational, educational,
and public safety neighborhood enhancements.
The Housing Production Trust Fund (HPTF) is funded through a dedication of 15 percent of the deed recorda-
tion and transfer taxes and is focused on producing and preserving units of affordable housing for low- and mod-
erate-income residents. At least 40 percent of all funds must be used to serve households with incomes at or below
30 percent of the area median income (AMI), at least 40 percent of the funds must be used to serve households
with incomes between 30 percent and 50 percent of AMI, and the remaining 20 percent of funds may be used to
serve families with incomes up to 80 percent of AMI. In addition, Council authorized securitization of a portion
of the HPTF revenues in order to provide the ability to obtain larger, lump sum infusions of funds for affordable
housing projects. The HPTF has been a strong tool to preserve and produce affordable housing in the District,
which was particularly important during the recent, rapid increases in residential real estate prices.
On occasion, Major Projects are financed through the issuance of revenue bonds using dedicated tax revenues for
debt service. In 2008, the Nationals Park baseball stadium opened with fanfare along the west bank of the Anacostia
River. In order to entice Major League Baseball to move a team to the District, in 2004 the Council approved a
financing package consisting of a $534 million bond issuance, and created new tax and fee revenues to pay the debt
service on those bonds. The new taxes included increased sales taxes at the stadium at a 10 percent rate, a fee on
District businesses with gross revenues greater than $5 million, and an increased utility tax on non-residential cus-
tomers in the District. In addition, the team’s rent is dedicated to paying debt service on the bonds.
The new stadium was completed in March of 2008. The Council’s decision to support the stadium was based on
the strong economic engine the Nationals’ presence and the stadium itself would provide to the neighborhood
around South Capitol Street, and to the District overall. Other recent examples of major projects financed with
dedicated tax revenues for a limited duration include the financing of the Walter Washington Convention Center
and the public infrastructure improvements necessary to attract private capital to build the Verizon Center. In
another example of the creative use of revenue bonds, in FY 2006 the District borrowed $245 million to finance
improvements in public health care. The so-called “tobacco bonds” are securitized with revenues dedicated from
the District’s apportioned share of tobacco lawsuit settlement proceeds.
Tax Abatements
Forgiving real property taxes, personal property taxes, or sales taxes during construction can reduce the cost of oper-
ations to a developer. Abating real property taxes on a temporary or permanent basis for a project will increase an
owner’s net operating income (NOI) thereby increasing their financial capacity to develop, own and manage a
property. Tax abatements almost always have a net fiscal impact as it is possible that the cost of the subsidy to the
District is greater than the value of the subsidy to the project depending on the developer’s tax status.
Tax Increment Financing (TIF)
A TIF subsidy is a way to finance development by capturing the future anticipated growth to the District’s tax base
caused by a new development. The District borrows to finance a project, and the net new taxes generated by the
completed project are devoted to repaying the borrowing. Once repayment is complete, the new revenues become
part of the District’s tax base. The DC Council passed the TIF Act in 1998 and has authorized up to $500 million
of borrowing under that Act. The Council has also authorized numerous TIFs separately, that are not subject to
Financing Economic Development
5-3
that $500 million borrowing limit.
Payment in Lieu of Taxes (PILOT)
Under the District’s PILOT Act, which was passed in 2002, a property that is currently tax-exempt (because it is
owned by the Federal Government, the District Government, or a non-profit entity) and is being transferred and
developed for what would be a private, taxable use can be declared tax-exempt and then supported by a payment
from the owner equal to 100 percent of what its real property taxes would be if the property were taxable. This
Payment in Lieu of Taxes can support the debt service for public financing that will support the project. Like a
TIF, when the PILOT is paid off, the exemption is terminated and the new revenues become part of the District’s
tax base. The Council authorized $500 million of borrowing under the PILOT Act and also authorized PILOT
financings not subject to the $500 million borrowing limit.
In 2006, the Council approved its first project under the PILOT Act. The United States Department of
Transportation building at that time was under construction and near completion. The building is now privately
owned with a long-term federal lease. The District issued a 15-year bond totaling $111.5 million, which will be
repaid by PILOT payments from the private owner of the building. Proceeds are funding the construction of a 5-
acre waterfront park adjacent to the site, and the development and construction of parks and infrastructure
throughout the Anacostia Waterfront Initiative area. In 2022, when the bond matures, the property will begin pay-
ing real property taxes into the general fund.
In addition, outside of the PILOT Act, the Council has also authorized negotiated PILOT payments from a
developer that are not associated with a debt issuance. For example, in order to lure a non-federal museum to the
District, the District agreed to exempt the property owned by the museum, including residential units and com-
mercial space. The owner agreed to make a Payment in Lieu of Taxes on portions of the property.
Information and Regulation
Zoning relief and reduction of regulatory burdens
The District’s zoning regulations control land use, density, height, and bulk characteristics of all zoned property.
Construction or rehabilitation of property must conform to the requirements imposed by the Zoning Regulations
and Zoning Map adopted by the DC Zoning Commission, or must obtain regulatory relief as required by the zon-
ing administrator. Approvals may be necessary by the Zoning Commission for map or text amendments, air rights
development, or a Planned Unit Development (PUD), by the Board of Zoning Adjustment for variances, special
exceptions, or appeals. Special reviews of proposed chancery development by the Board may be required for facili-
ties proposed to be located in certain mixed-use areas of the city. Applicants may either modify the project pro-
posal to conform with zoning regulations, apply for relief from the Zoning Commission and/or Board of Zoning
Adjustment, or, with cause, appeal the Zoning Administrator's decision to the Board of Zoning Adjustment. The
Council can provide a developer with a density bonus so that the developer can build more square feet than they
would otherwise be entitled to under existing zoning laws.
The District constantly evaluates other regulatory burdens to reduce the cost and time associated with government
approvals such as permitting and inspection.
Planned Unit Development (PUD)
The planned unit development (PUD) process is designed to encourage high quality development that also pro-
vides direct public benefits. The overall goal is to permit flexibility of development and other incentives, such as
increased building height and density; provided, that the project offers a commendable number or quality of pub-
lic benefits and that it protects and advances the public health, safety, welfare, and convenience. A comprehensive
public review by the Zoning Commission of the specific development proposal is required in order to evaluate the
public benefits offered in proportion to the flexibility or incentives requested and in order to establish a basis
for long-term public control over the specific use and development of the property. While providing for greater flex-
FY 2010 Proposed Budget and Financial Plan: Special Studies
5-4
ibility in planning and design than may be possible under conventional zoning procedures, the PUD process shall
not be used to circumvent the intent and purposes of the Zoning Regulations, nor to result in action inconsistent
with the Comprehensive Plan.
Information dissemination
The District can work with businesses or developers to help qualify them for non-District funded forms of subsidy
such as New Markets Tax Credits or other Federal assistance programs, and to help them understand District
requirements and opportunities. The District has also created an on-line Business Resource Center, where com-
prehensive information is available to guide small business owners and other prospective investors. The non-profit
Washington DC Economic Partnership, partially funded by District government, provides marketing resources and
research-based information to businesses and investors.
Economic Development Authorities of the District of Columbia
A number of independent instrumentalities of the District government have been established to manage programs
that impact economic development in the District.
Independent Agencies
The Redevelopment Land Agency (RLA) was created in the 1940s to manage the sale and development or rede-
velopment of Urban Renewal and other parcels located throughout the District. In 2001, the National Capital
Revitalization Corporation (NCRC) was launched as a component unit within the District with a start-up feder-
al grant of $25 million and a local grant of $8.5 million. At the creation of NCRC, the RLA portfolio was trans-
ferred to the RLA Revitalization Corporation (RLARC), to be managed by NCRC. NCRC’s mission was to spur
economic and neighborhood development in the District.
In 2004, the Council established the Anacostia Waterfront Corporation (AWC) to be responsible for the devel-
opment, redevelopment, and revitalization of the lands adjacent to the Anacostia River. The AWC was responsible
for implementing the Anacostia Waterfront Framework Plan, which included both commercial development, and
the development of parks and infrastructure.
The AWC, the NCRC, and the RLARC were all abolished in 2007, and the responsibilities, assets, and liabilities
of those agencies were transferred under the control of the Deputy Mayor for Planning and Economic
Development as of October 1, 2008.
The Sports and Entertainment Commission (SEC), an independent agency of the District of Columbia govern-
ment, is responsible for the management and operation of Robert F. Kennedy Memorial Stadium, the DC Armory
and their adjacent facilities and for presenting and promoting sports, entertainment and special events in the
District. In addition, the SEC managed public infrastructure construction for the privately owned Verizon Center
and the new publicly owned baseball stadium named Nationals Park.
The Washington Convention Center Authority (WCCA) is an independent authority of the government of the
District and a corporate body that has a legal existence separate from the District, created pursuant to the
Washington Convention Center Authority Act of 1994 as amended. WCCA was established for the purpose of
acquiring, constructing, equipping, maintaining and operating a new convention center in the District, and engag-
ing in activities it deems appropriate to promote trade shows, conventions and other events closely related to activ-
ities of the Convention Center. WCCA is governed by a nine-member Board of Directors.
Financing Economic Development
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Housing Agencies
The District of Columbia Housing Authority (DCHA) and the District of Columbia Housing Finance Agency
(DCHFA) were established independently from the District government to enhance housing opportunities with-
in the District. The DCHA is primarily responsible for developing and managing public housing in the District.
The DCHFA is responsible for financing certain single and multifamily loans in the District. These loans are gen-
erally targeted to first time homebuyers and/or affordable housing, and are issued at below-market interest rates.
These agencies often work in cooperation with the District’s Department of Housing and Community
Development and the Deputy Mayor for Planning and Economic Development to facilitate housing and mixed-
use economic development projects in the District.
The District’s Economic Development Programs
The District’s operating and capital budgets include some of its economic development programs as well as specif-
ic projects that are financed on a one-time basis. Other economic development programs are recorded outside the
operating and capital budgets.
Budgeted
The Housing Production Trust Fund program provides financial assistance to nonprofit and commercial devel-
opers for the planning and production of low to moderate-income housing and related facilities. Housing assistance
can be for rental or homeownership properties. The program has a wide range of housing initiatives that focus on
housing production and preservation.
The Neighborhood Investment Fund is an annual, non-lapsing fund to finance economic development and neigh-
borhood revitalization in 12 targeted areas of the District. The fund is capitalized by an annual contribution of 15
percent of the personal property tax, not to exceed $10 million.
The New Communities initiative is a comprehensive partnership between the District government, neighborhoods
and other public and private stakeholders. The initiative focuses on neighborhoods where older public housing
developments are located and where high concentrations of poverty and crime exist. The goal of the initiative is to
redevelop the neighborhoods into healthy, vibrant communities for current and future residents.
The Great Streets initiative targets the District’s gateways to improve the condition and function of roads and streets
and to promote local business enterprises and improve neighborhood quality of life. Great Streets is a multi-disci-
plinary approach to corridor improvement. By uniting infrastructure investments "between the curbs" with eco-
nomic development support "behind the curb," various District agencies work to reposition the Great Streets cor-
ridors as vibrant and unique community centers that meet the needs of local residents, visitors, workers and entre-
preneurs. Toward this end, the District’s Department of Transportation (DDOT) has committed more than $100
million to define, improve, and maintain the public realm of the corridors. A majority of this financing is from the
securitization of advertising revenue from bus shelters located on public space. These resources afford improvements
such as restored streets, sidewalks, transit services, lighting and trees reveal the promise of target neighborhoods -
places that will soon bring population back to Washington, generate commerce, create jobs, expand the District's
tax base, and improve the quality of life for the residents.
The DC Main Streets Program provides technical and financial assistance to competitively selected older, tradi-
tional business districts in need of retail and small business enhancements. The program is funded by DC govern-
ment and affiliated with the National Trust for Historic Preservation’s National Main Street Center, which success-
fully promotes an historic preservation based approach to neighborhood economic development through state and
FY 2010 Proposed Budget and Financial Plan: Special Studies
5-6
local affiliates. Barracks Row Main Street, one of the District’s pioneering Main Street programs since 1999, is rec-
ognized as a “Great American Main Street” by the National Trust. The District’s investments on Barracks Row (8th
Street, SE) include grants for organizational mission support, façade rehabilitations, marketing and economic
restructuring, and substantial public infrastructure upgrades.
Off-Budget
Access to the Tax Exempt Financial Market (IRBs)
Since 1994 the DC Industrial Revenue Bond (IRB) program has issued approximately $6.2 billion in tax-exempt
revenue bonds to facilitate the development of capital projects for businesses, organizations, associations, universi-
ties and schools throughout the District. The program provides qualified borrowers with access to the tax exempt
financial market to borrow investment capital in the form of non-recourse or “conduit” bonds supported by rev-
enue guaranteed by the borrower and not backed by the full faith and credit of the District of Columbia. Therefore,
there is no fiscal impact from this program except for some modest program administrative fee income. Because
investors who buy DC revenue bonds accept a lower rate of return in exchange for the interest income being exempt
from federal and most state taxes, the loans are made at below-market interest rate thus helping to lower the cost
of funds available for capital improvements. Projects are typically in the areas of health care, housing, transit and
utility facilities, recreational facilities, health facilities, manufacturing, sports, convention and entertainment facili-
ties, elementary, secondary, college, and university facilities, student loan programs, pollution control facilities, and
industrial and commercial development.
TABLE A: TIF, PILOT, and Revenue Bond Issuances Since FY 2001
Fiscal Yr Amount
Name Issued ($ millions) Status
International Spy Museum TIF 2001 6.90 Paid in full
Mandarin Oriental Hotel TIF 2002 45.99 Issued and repaying
Gallery Place Mixed Use Development TIF 2002 73.65 Issued and repaying
Embassy Suites Hotel TIF 2004 11.00 Issued and repaying
Capitol Hill Towers Development TIF 2004 10.00 Issued and repaying
DC-USA Retail TIF/Revenue Bond 2006 46.90 Issued and repaying
Shakespeare Theatre TIF 2006 10.00 In escrow, release 2011
H&M TIF 2006 2.90 Issued and repaying
US Department of Transportation PILOT 2007 111.55 Issued and repaying
West Elm TIF 2008 5.00 Issued and repaying
Zara TIF 2008 1.75 Issued and repaying
Crime & Punishment Museum TIF 2008 3.00 Issued and repaying
Madame Toussauds TIF 2008 1.30 Issued and repaying
Subtotal, TIF and PILOT 329.94
Verizon Center Revenue Bond 2007 50.00 Issued and repaying
Housing Production Trust Fund Revenue Bond 2007 34.10 Issued and repaying
Subtotal, Revenue Bonds 84.10
Total, TIF, PILOT, and Revenue Bonds 414.04
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TABLE B: Economic Development Debt Authorized - Not yet Issued
Amount
Name ($ millions) Status
Downtown Retail Priority Area (DRPA) TIF 16.05 Original DRPA authority was $30 million
Arena Stage TIF 10.00 Expected issuance March 2009
Fort Lincoln Retail Priority Area TIF 10.00 Authorized
Skyland Retail Priority Area TIF 40.000 Authorized
Rhode Island Place PILOT 7.20 Expected issuance May 2009
Southeast Federal Center PILOT 90.00 Authorized and obligated,
Capper Carrollsburg PILOT 55.00 Re-authorized Dec 2007
Radio One TIF 8.00 Expected issuance 2009
Great Streets Retail Priority Areas TIF 95.00 3 projects selected as of January 2009
Convention Center Hotel TIF 187.00 Expected issuance Spring 2009
Southwest Waterfront TIF/PILOT 198.00 First of three issuances expected 2014
O Street Market TIF 46.5 Expected issuance Spring 2010
Housing Production Trust Fund Revenue Bond 190.00 Approximate based on max annual debt service
Total $952.75
Tax Abatements
Tax incentives are also off-budget in that they do not appear as expenditure items for the District but as foregone
revenue. Their impact is not specifically shown in the budget and financial plan but directly affects the amount of
revenue available to the District in a given year. From FY 2005 through FY 2008, the Council approved tax abate-
ments that had a fiscal impact of approximately $60 million during the budget periods beginning in FY 2006 and
ending in FY 2012. Many of these abatements support economic development projects, such as the construction
of supermarkets in under-served neighborhoods.
Projects supported through TIF and PILOT financing that are not supported by the Downtown TIF Area,
described below, are so-called “off-budget”, in that the debt service payments do not flow through the District’s
General Fund. Instead, the funds supporting these projects are established as separate revenue funds.
The Council has authorized a total of $1.3 billion in economic development debt since 2001, of which approx-
imately $414 million has been issued. The CFO has incorporated the expected debt service on the authorized debt
into its analysis of total District borrowing and debt capacity. The 14 TIF and PILOT bonds and 2 other revenue
bonds issued are shown in Table A. Bonds authorized, but not yet issued, for additional economic development
projects are shown in Table B.
This list does not include (1) borrowing for the new baseball stadium or (2) the securitization of future rev-
enues coming to the District from the tobacco companies as part of the 1998 settlement.
In FY 2002, the Downtown TIF Area was established in order to receive an investment grade rating on the
Gallery Place and Mandarin TIF bonds. These projects were perceived as risky, so the District pledged a portion
of incremental sales and property taxes in a specific area of the District to pay the debt service on these bonds if the
projects themselves did not generate sufficient taxes. Since the establishment of the Downtown TIF Area in 2002,
the Council has approved the use of the Downtown TIF to enhance the rating of other projects including the
Shakespeare Theatre, the Southwest Waterfront, the O Street Market, the Verizon Center and the Arena Stage.
When possible, the District has moved from issuing and selling TIF and PILOT Bonds, to issuing a Note directly
to the developer or to a financial institution. Often in a Note structure, the District is only obligated to pay the
FY 2010 Proposed Budget and Financial Plan: Special Studies
5-8
taxes generated by the project, and is not obligated to pay anything if the project is not completed. Therefore, the
District does not take on any financial risk if the project is not completed. This Note structure has been used in
the TIF financing of the Spy Museum (which paid off completely in 2007), Capitol Hill Towers, Embassy Suites,
H&M, West Elm, Zara, National Museum of Crime and Punishment, Madame Toussauds, and the planned
PILOT financing of the Southeast Federal Center project.
Financing Economic Development
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FY 2010 Proposed Budget and Financial Plan: Special Studies
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