wamu.org/story/19/05/16/d-c-council-agrees-to-fund-public-housing-repairs-but-chief-financial-officer-objects/
D.C. Council Agrees To Fund Public Housing Repairs, But Chief Financial Officer Objects | WAMU On Monday, D.C. Council Chairman Phil Mendelson told reporters the city had found some additional money — a one-time payment of $30 million — for repairs to the city’s public housing stock. Thousands of D.C. residents live in units with maintenance needs deemed “extremely urgent” by the D.C. Housing Authority.
The money, Mendelson said, came from “unrestricted reserves” from Events DC, which operates the Walter E. Washington Convention Center and other sports and tourism activities.
Become a sponsor? On Tuesday, the Council approved that transfer of funds in its first of two votes on next year’s budget. The body also approved an additional transfer of $30 million from Events DC to reverse a tax on hotel rooms, which the mayor had proposed in her version of the budget.
But Mendelson knew the city’s chief financial officer, Jeffrey DeWitt, believed the Council did not have the authority to use the Events DC money for those purposes.
“What I recommend tomorrow may result in a letter from the chief financial officer,” Mendelson said Monday. “It won’t be the first time, and we will work our way through it.”
On Wednesday evening, DeWitt did just that. His office issued a letter outlining his objections to the Council’s use of Events DC money. DeWitt said he will not certify the budget as it currently stands.
The letter from DeWitt to the Council says using the reserves in question would violate a legal commitment to the holders of the bonds that built the convention center.
According to the letter, the city pledged that all Events DC revenue, as well as all revenue from the city’s 4.45% hotel sales tax and 1% restaurant tax, would be devoted to the repayment of those bonds. And, DeWitt wrote, even excess revenue — the money leftover once Events DC pays its debt obligations and maintenance costs — must be put toward repaying bondholders
“In other words, our word is our credit,” DeWitt wrote. “If we break our promises to investors, we not only lose our credit but also our credibility and reputation.”
The letter said misusing the money could result in a downgrade of the city’s bond rating. And if borrowing became more expensive for the city, DeWitt said, the modernization of schools and other public facilities could slow down.
After Mendelson announced the one-time payment to the Housing Authority, Daniel del Pielago, Organizing Director with the community group Empower DC, described it as “a good-faith effort,” and a sign that local officials are recognizing that federal funding is not sufficient when it comes to public housing.
“Our city has the money,” del Pielago said. “So I’m trying to be hopeful that our elected officials are really understanding that local money is needed for public housing.”
D.C. Housing Authority Executive Director Tyrone Garrett testified in April that the agency needed significant investments to address a backlog of repairs in the city’s public housing. Garrett said a local investment of $12.5 million dollars a year for two years would allow the agency to address the urgent needs at just two of its properties The agency has said more than 2,600 units across 14 of its properties have urgent problems, including lead and mold.
According to Garrett’s testimony, it would take a yearly investment of $45 to $50 million for 17 years to get the city’s public housing fully up to 20-year viability.
In budget talks earlier this month, some members of D.C.’s Council were hesitant to allocate significant, recurring funds to the Housing Authority before seeing an audit of the agency due at the end of May.
On Monday, Mendelson said he agreed with the mayor that issuing a long-term promise would be “premature.” But he did express cautious support for a larger local commitment to public housing.
“The thinking is if we could do something for public housing similar to what we do for Metro where we have a dedicated funding stream … against which they can borrow, then it actually leverages more money,” Mendelson said. “It’s not a bad idea.”
D.C. has committed to give Metro $178.5 million in annual funding as part of a regional funding stream. But Mendelson said it took two or three years to “get everybody comfortable” with that kind of financial commitment.
Meanwhile, the Council did pass a more secure boost to other housing initiatives on Tuesday. A new amendment to the 2020 budget reduced a tax incentive for tech employers and freed up additional funds for homeless outreach and permanent supportive housing, a program that houses homeless individuals and provides them with wraparound services.
Neither change will be final until the Council’s second budget vote on May 28 — and until DeWitt certifies the budget as balanced.
Jenny Gathright is a reporter in the WAMU newsroom.
Mary Bolton 202-390-1208