Press Release: Councilmember Vincent C. Gray Calls on the Mayor & Council to Use Surplus Funds to Help End Food Deserts in Wards 7

News Release: Ward 7 DC Council member Vincent Gray

January 31, 2020

Contact: Takiyah “T.N.” Tate

WASHINGTON, D. C. – Today the Offices of the Chief Financial Officer and Inspector General released the District of Columbia’s Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2019.  Upon review, Councilmember Vince Gray said:

“I congratulate our Chief Financial Officer Jeffrey DeWitt and all the staff of the Office of the Chief Financial Officer on the release of the 23rd consecutive clean audit opinion for the District of Columbia government.  I also congratulate Mayor Muriel Bowser, City Administrator Rashad Young, the Office of the Inspector General, and all the staff in the Executive and Legislative branches of government who worked hard to deliver the CAFR on time.  I am particularly excited to see our cash-on-hand has increased to a full 60 days and is now at the goal the Council set in the spring of 2010, plus an additional $323.6 million.    Over the last eight years the legislation I championed as Council Chairman has guided a turnaround in the District of Columbia’s fiscal situation.  We went from being on the cusp of a bond downgrade to achieving a AAA bond rating, the highest level in the history of the city.

Following Fiscal Year 2010, the District’s fund balance had been depleted of every discretionary dollar due to agency overspending and a revenue downturn during the Great Recession.  The District had only 21 days cash-on-hand.  The bond rating agencies had placed the District of Columbia on “negative outlook” and were considering a downgrade if the city did not immediately turn its finances around.  As Council Chairman, I drafted the “Sustainable Capital Investment and Fund Balance Restoration Act of 2010’ that was approved in the Fiscal Year 2011 Budget Support Act of 2010. This law created two new locally mandated reserve accounts, a Fiscal Stabilization Reserve and Cash Flow Reserve, and mandated that all unassigned local surplus funds be deposited into these two accounts until the District of Columbia achieved 60 days cash on hand, which was recommended as a best practice for state and municipal jurisdictions by the Government Finance Officers Association (GFOA).  The goal was to gradually build the District’s fund balance to end our reliance on short-term cash flow borrowing until the District reached 60 days cash-on-hand, and consequently, to improve the District’s bond ratings.

The District’s reserve funds provide the city with important liquidity to fund the operations of government from the start of the fiscal year on October 1st, instead of having to use short-term tax revenue anticipation note borrowing until March and April when property and income taxes provide an infusion of revenue. 

Another exciting development of reaching 60 days of operating cash is that legislation I championed as Mayor, now kicks in, and dedicates 50% of additional surpluses to the Housing Production Trust Fund and 50% to pay-as-you-go capital funding.  The OCFO has certified that there is currently $323.6 million of additional surplus, so that equates to $161.8 million available for each purpose.  This means $161.8 million can now be appropriated to ending food desserts in Wards 7 and 8 to support residents through pay-as-you-go capital to fund legislation I introduced to end food desserts through the construction of grocery stores and co-anchor retail, entitled D.C. Law 22-285, the East End Grocery Incentive Act of 2018.

Section 3 of this important legislation creates an East End Grocery Incentive Program within the Office of the Deputy Mayor for Planning and Economic Development, which allows the District to subsidize the construction of new grocery stores and retail co-anchors at Skyland Town Center; Capitol Gateway; East River Park; the Shops at Penn Hill (Penn Branch); the Parkside Planned Unit Development; St. Elizabeths East Campus; United Medical Center; Columbian Quarter; and Deanwood Town Center.  Section 3(c) of this legislation unambiguously states that this ambitious initiative to eradicate food desserts “shall be funded” through the $161.8 million in surplus pay-as-you-go capital funds reserved through D.C. Official Code § 47-392.02(j-2)(4)(B).

The funds still need to be transferred to this initiative through a supplemental budget action or contingency cash request, both of which must be initiated by the Executive Branch, and until then, funding is trapped in a holding account.  An earlier version of this legislation marked up by the Committee on Business and Economic Development automatically transferred the first $200 million of pay-as-you-go capital surplus into the East End Grocery Incentive Program, which would have fully funded the program, but this language was removed in the Committee of the Whole print of the legislation, thus creating uncertainty and the need for an extra step.

I am excited to work with Mayor Bowser and Deputy Mayor John Falcicchio, who I believe share my commitment to ending food deserts in Wards 7 and 8, to leverage this $161.8 million to ensure that the District develops all nine of these sites with new full-service grocery stores, retail, and sit-down restaurants.  All too often full-service grocery stores and retail amenities have arrived after gentrification.  Now we have an opportunity to leverage the District’s fiscal success to eliminate food deserts in Wards 7 and 8 while bringing hundreds of jobs to our residents.  It is deplorable that over 150,000 residents in Wards 7 and 8 have only three full-service grocery stores at the present time, and with at least five shovel-ready sites and $161.8 million available, there are no excuses why we shouldn’t see a massive reinvestment in our neighborhoods.  I am also incredibly proud that 50% of certified resources will be going to the Housing Production Trust Fund.  I would like to see a greater emphasis on workforce housing development in Ward 7, and we now have a dedicated stream of funding to make our housing goals a reality.”

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