Good morning.

Why don't we get started?

This is the press conference that I have before legislative meeting.

And tomorrow, June 2nd, we will have a legislative meeting.

It will be our regular legislative meeting for the month of June.

I am told, I think this is correct that there may be a legislative meeting every week in the month of June because we're dealing with budget.

Although I suspect June 16th we will not have a legislative meeting since that's uh election day.

Um but we vote on the budget next Tuesday, June 9th, and we vote again on the budget June 23rd.

And uh I think that's also a regular committee, the whole meeting, and then we have a regular meeting uh June 30th, which will be our regular meeting for the month of July, so that we can have an additional meeting on July 14th before we go on recess.

So the council will be dealing with the budget on June 9th and 23rd, uh, and we have under the Home Rule Act a uh deadline of uh 70 days to vote on the budget, which we honor, and uh so June 9th and June 23rd.

Uh tomorrow's gonna be a fairly light day with regard to the legislative agenda.

We do have a committee of the whole additional committee of the whole meeting uh beforehand, uh we will be marking up three nominations by the mayor to the commission on arts and humanities are all reappointments.

Two nominations to the board of zoning adjustment.

These will be new members.

Right now, the Board of Zoning Adjustment doesn't have a quorum.

And with these two uh appointments, assuming the mayor appoints after we confirm, um, the um board of zoning adjustment will be able to resume its meetings.

Uh this is a problem for businesses and homeowners who need relief from the uh Board of Zoning Adjustment because it has been unable to meet for several months.

And then we have four revenue bonds uh projects for approval.

I don't think they're controversial.

Friendship Public Charter School, DC Preparatory Academy, Food and Friends, and Methodist Home doing business as Forest Hills.

Uh these are where we use uh a mechanism provided in the federal internal revenue code that uh we're able to provide these uh bonds provided that they meet certain criteria, are eligible.

Uh we provide these bonds at uh no cost to the district, uh, but it's uh cheaper borrowing for these organizations.

I believe they're all nonprofits, and then we have uh first reading.

Well, we'll have a markup and first reading on the open meetings clarification, which is has been law for a year and a half, maybe as emergency, and uh so this will be moving forward, uh, so we don't have to keep doing emergency bills.

The uh following the committee of the whole, we will have a legislative meeting our 30th.

At one time I was told I have to say how many meetings we legislative meetings we've had in the council period, so my bad if I don't say tomorrow 30th legislative meeting at council period 26.

Uh I think you all have the um agenda.

Um it's there are a number of items, it's almost all consent.

Uh if I remember correctly, there are no emergency uh legislation from members tomorrow or from the mayor.

Uh we will have final reading on the motor vehicle insurance modernization, which will raise the minimum insurance requirements for motor vehicles in the District of Columbia.

Those um minimum insurance requirements have not gone up since 1986.

That was 40 years ago.

Um, if I remember correctly, the increase that uh this legislation would mandate is similar, very similar to Virginia, and other states have been moving in this direction of updating their minimum requirements.

Of course, motorists, many motorists have uh, or I should say motor vehicle owners have uh insurance that that exceeds it's greater than what the minimums, these minimums are.

Um I think maybe I'll just kind of leave it there and see if there are questions on any of the matters that are on the agenda or otherwise.

Okay, um, question about the BZA here.

So I was told by the Bowser administration that these nominations were going to be filled last month.

That didn't happen, and one of the applications or nominations from uh Marquis Chapell was withdrawn.

Do you know why it was withdrawn?

I do not know why it was withdrawn.

A series of delays here.

Uh we received I don't know when we received the nominations.

I think uh we received the nominations in May.

Um, I believe it was in April.

Sorry, could you check while I'm standing here?

Um we scheduled the hearing pretty quickly.

Uh I mean, we did receive these during budget season, which is always uh a difficult time to schedule anything that isn't budget.

Um, I'll get you the date for when they were submitted to us.

Uh, we expected we were going to receive them before the budget, and um we didn't, so uh but we've moved quickly.

And uh I think we have not provided the um typically the rules don't require require it, but typically we give two weeks for the record to close.

I don't think we did that.

I don't have the reports in front of me, but I think we just had the hearing less than two weeks ago.

April 21st.

And so with these two appointees, plus I believe the BZA also has a rotating member that will lead to three members on board, which will create a quorum.

When do you think the BZA will actually be able to start holding meetings again?

Uh well I asked at the confirmation hearing.

Um or else I asked at the budget hearing, I don't remember which.

Uh I expect that they're gonna resume in June.

Now, how quickly I don't know.

So the process is one where the council has to act.

So if we got them April 21st, we are acting within six weeks, which is very quick, and it actually makes me a little uncomfortable because the Board of Zoning Adjustment is one of those boards where there's a lot of public interest.

Um, but uh we filed the hearing notice as soon as we had the three.

Uh I think the third was included on the notice, but then subsequently was withdrawn for reasons I don't know.

Um, and uh so we are tomorrow um going to have the council action.

After we act, uh mayor has to um actually make the appointment, and uh which I assume she will do.

So that's probably adds another week to the process.

And has the NCPC appointed their designee yet?

No, all right.

Thank you.

Yes, so there are five members of the Board of Zoning Adjustment, three appointed by the mayor after confirmation, uh one who's a rotating member from the zoning commission, and then um an appointment from the National Capital Planning Commission, and the NCPC and uh the three mayoral appointments have all been vacant.

Martin.

All right, so two quick questions and then a slightly longer one.

The first one, just to confirm there's no planned vote tomorrow on the teen curfew emergency bill, right?

Correct.

Uh the votes are still not there.

Just for clarity, because some people have been blaming the council.

There are 13 members of the council.

Permanent legislation was approved by eight members.

Seven is a majority, eight is more than a majority.

There have been eight members who have consistently been supportive of both the permanent legislation and the emergency legislation.

There are five members.

It used to be four, but now there are five members who have not been willing to um support the declaration.

I have some frustration with that because the council has historically been very good about recognizing that when one is on the losing side, they don't obstruct the majority from moving forward.

So if one is um committed to opposing the curfew legislation, they could still allow the council to go forward by giving the two-thirds vote necessary for the declaration, then vote against the um the bill itself.

And that preserves the position of the member that they don't support the legislation, um, but enables the majority to move forward.

That's not happened here, and I think that's inexcusable.

And then moving on to the budget.

Do you have any timeline?

I can't believe I'm asking this, but do you know when you're going to be releasing the uh your final report kind of outlining the changes that are going to be made?

Uh we're required to do it 24 hours in advance, which would be next uh Monday.

Okay.

Um I can tell you, as of this morning, there's still a lot that's in flux.

Okay.

And speaking about the budget, I know that at your budget um session a couple weeks ago, you guys discussed.

Well, you talked about this 400 million dollars in additional revenue, both from decoupling and and some money from revenues.

Um, reserves.

Reserves, sorry.

And we also know that the CFO had been meeting with council members um and given gave a presentation talking about this impending fiscal cliff, as he called it, mostly because of spending from reserves and saying that by 2028, but FY28, there may be no reserves left, and that would put the city in a precarious position.

I'm just curious um if you'd like to respond to that specifically because you're trying to pull more money for reserves to to plug some holes in the budget this year.

The CFO has not said that there would be no reserves.

He has said that the uh the fund balance would be significantly reduced.

Uh there's some inconsistency here because the fund balance consists of a number of different types of money, uh some of which is the reserves, maybe half is the reserves.

Some of it is uh money that uh we reserve use of the word differently, reserve uh for future budgets.

Uh so we've done this for at least a decade, uh, where if we identify some additional revenues this year, I shouldn't say revenues, we've identified some additional funds this year, FY26, while we are adopting the FY27 budget, we will probably push some of those FY26 additional funds forward into FY27, and we've been known to push it through the financial plan, meaning that let's say there's a hundred million dollars that's available because of increased revenues uh that came in, the tax revenues are up, for example, or we made some cuts in FY26, the current fiscal year.

Now that we're more than halfway through, almost three quarters of the way through, we can look at actual spending and see that an agency is spending half its budget.

And as I said, we're three-quarters of the way through.

So we may take some cuts there.

In those ways, we can identify money this year that we could push through to next year or even all four years of the financial plan.

Um we call that reserve for future budgets.

And uh just to give you a sense, um at uh one as of last uh September 30th.

We had 1.7 million dollars reserved for future budgets.

That's a lot of money.

Did I say 1.7 million?

No, 1.7 billion dollars reserve set aside for future budgets.

1.7 billion dollars.

The CFO uh has noted that um he's had a policy of um that we can't push money through the entire financial plan, and as a result, there will be less in the way of um that fund balance available for future budgets.

But that is affecting his ability his liquidity concern.

It makes no sense to me.

So on the one hand, he's saying you can't push the money through, on the other hand, he relies on her pushing through the money in order to have uh liquid cash.

Um there's an inconsistency there.

Um, so do you think was he being alarmist?

Because I mean he gave this presentation.

Yes, I think he's being alarmist.

Uh and a couple of months ago at one of these press conferences, I said that um the challenge here is that he is hoarding cash.

So we've had as a goal 60 days of reserves.

We exceeded that by 150 to 200 million dollars last September 30th.

That's the um the excess that I have said I am going to tap that he is um lobbying members against.

It's about 150 million dollars.

If that 150 million dollars is not available to close some of the gaps, gaps in public education, public health, uh some core services uh, including like uh public works.

Um if that money is not available for those needs, then um they make increases the pressure for the council to increase taxes.

Um and I think that's an unacceptable choice that the CEFO is attempting to impose on the council that let me hoard additional money in the reserves and then you can raise taxes to meet these uh needs.

Um part of the reason for so many cuts by the mayor was because the um mayor's position in developing the budget is different than our position in adopting or appropriating the budget.

And so when the chief financial officer said that she could not access the decoupling revenue, even though he had recognized it in uh fiscal impact statement, and when the chief financial officer said that she could not touch the reserves, she had no choice but to go along.

And in fact, you'll remember when she did her presentation, she pointed to this and said that if those dollars were available, she recommended that we use it uh for such needs as um the compensation agreements that are being negotiated, or the child care family subsidy programs that have gotten a lot of attention, uh, or even the um restoring some of the cuts she's proposed to the universal paid leave program.

She was unable to do that.

Um we're in a position where we can because by law we are the appropriators, we are the appropriators, not the mayor, not the chief financial officer.

Um I will note since you've got me talking about this, um, that um when the chief financial officer, uh our budget's based on the revenue estimates that the chief financial officer prepares in February of each year.

We can't question his revenue estimates, or we can question it, but we can't do we can't do anything about it.

And when I compared the last available year, which was fiscal year 2025, what he estimated our revenues would be, on which we had to base the budget, and what the actual revenues were as of the ACFER at the end of fiscal year 2025, he was off by 834 million dollars.

That's more than three quarters of a billion dollars he was off.

The year before the same comparison, he was off by close to 600 million dollars.

Um he's being more than conservative, and we can't do anything about it, but I would just note for context that uh the revenue estimates right there give him uh liquidity cushion.

His concern about liquidity is in fiscal year 2028.

What we have before us is fiscal year 2027.

So there's a full year, actually more than that, because uh we're in June of fiscal year 26.

Um there's plenty of time to um work through uh the glue liquidity issues.

Uh we have pressed him over and over and over again for what legislative changes need to be made to deal with uh cash flow, and uh the only suggestion we've gotten is legislation that we'll be acting on as part of the budget, which is um to uh change the way we paid the retirement board uh the pension contribution instead of one lump sum in October that we will pay at uh I believe it's uh quarterly um uh twice a year.

We'll be paying it twice a year.

Uh but another um uh only like two weeks ago, three weeks ago, the CFO suggested for the first time that maybe we should look legislatively at the Wamata payment.

Prior to that, he had said we don't need to legislate that, but now he's saying we should consider that, which we certainly will.

And we've also talked, the committee has talked about, I have talked about maybe changing the way real property taxes paid, that would deal with liquidity issues, but he hasn't sent us legislation.

I've asked him for cash flow report, uh excuse me, cash flow projections for the next two years.

Give us the projection so we can see what the uh problem is with liquidity, and uh have yet to get it.

You could check the hearing on his uh budget where I asked.

As of last uh September 30th, the total amount of cash that the CFO said we had was 4.9 billion dollars.

Of which the reserves were 2.2 billion.

The reserve set aside for future budgets was 1.7 billion.

So that just gives you more context here with regard to the argument that uh I disagree with that uh we can't touch the reserves because that will cause a liquidity problem two years from now.

Yes, sir.

Regarding the uh 400 million, I know the mayor sent over a letter saying that she was concerned that her the priorities that you just mentioned weren't gonna be um weren't being talked about among the council um and said, Yeah, I don't think that's not to interrupt you, but uh members have been talking about them.

Okay.

And then um follow up among the people that are saying the council of the council when it comes to the juvenile curfew or the U.S.

attorney, given that there's gonna be a gap um between when the mayor's executive order expires and the permanent legislation goes into place.

There's concern that she's gonna use um start charge uh you know um having criminal charges against parents um for like curfew violations.

She's been making those threats a couple times.

Are these parts of the conversations that you're having with the council and just your take on her continuing?

I mean, she's been calling press conferences continuously calling on charging parents now.

Uh yes, uh I'm not sure that I want to get into the uh wisdom of uh the wisdom of some some of what has been suggested.

Um I think the um U.S.

attorney who has prosecutorial discretion should uh um use the tools that she can, um, as long as they're effective.

Um what would be helpful perhaps is if she spoke with any of the five individuals.

So she has a press conference and she blames the council, but again, a majority of the council is uh in support of this curfew.

And let me just even though I think you all know this, let me be clear about this.

This is not uh the typical curfew, which is that there cannot be anybody under the age of 18 who's out on the streets after 6 p.m.

anywhere.

It's uh that the if the chief declares one of these special curfew zones, so right there there's a limitation, and the curfew zone is a geographic area, so that's a further limit limitation.

Chief has to declare it, it's a specific geographic area, and uh it's groups of eight or more.

So it's not just a uh a teenager who's prohibited, it's not that at all.

It's a groups of teenagers who are prohibited.

Um, I think that the uh Chipotle video that everybody saw, probably everybody around the world saw, is just embarrassing for the district.

Um, and my understanding is that the specialized curfews there have been no arrests, even though we've had uh this in effect as an emergency or temporary legislation for a year now, and there have been no arrests because the point of it is to deter these gatherings of of large groups of uh teenagers who take over a neighborhood.

Um that's what this is about.

It's it's very it's very limited.

Um, and the it just would help if the U.S.

attorney would focus on the five members instead of just casting this aspersion on the entire council.

Was there more to your question?

Because I feel like I interrupted you.

Sam.

Uh good morning, Chairman.

Uh what's been your conversation with the five council members who just won't budge on the declaration for the emergency curfew?

Well, I have uh focused on one in particular and um all kinds of conversation.

Um youth programming, more youth programming.

We have in this budget quite a bit of additional resources for uh youth.

You may remember that uh a couple weeks ago, Councilmember Parker tried to move an amendment to something, can't remember what, um, increasing uh some resources for youth programming, and Councilmember Lewis George objected, saying that uh she was not he was not being as um refined in his proposal as what she was working on in her committee, and what we saw with her committee budget recommendation is additional resources this year in DC Rec.

If I remember correctly, it's somewhere around two million dollars for youth programming.

Uh, but there are other proposals that came out of other committees that uh provide more opportunities, constructive opportunities for teenagers.

So um that's been an example of the kind of kind conversation we've had.

So I mean, at this point, what what inroads or what efforts do you see yourself making to get above that threshold to get to nine votes?

Well, I just think the public needs to understand that the reason why the council's not been able to implement this immediately is five members who are unwilling to no one of whom is willing to um allow the council to go forward with uh approved by approving the declaration.

So it's I explained this before.

I know you understand this, but just for the public's benefit, you know.

Our process is one, in order for us to consider implementing legislation immediately, it requires a declaration, and the declaration requires two-thirds vote, nine members.

Uh it can't be anybody absent doesn't count.

There has to be nine members who vote yes, and um word eight, uh, and that is holding up the majority from moving forward with the underlying bill, which only requires seven votes, and uh, you know, this is tried and true this approach.

That uh when we uh once we've passed a permanent, which we've done for the curfew, it's now up at Congress.

Um once we passed the permanent.

Uh we typically not typically, we often will implement it on an emergency basis or immediate basis, immediate, that's the point.

Um, and uh, but five members are in the way.

No doubt.

Uh can you talk about uh revenue raises that the council has considered, you know, this budget season.

I know about the surcharge on deliveries, but beyond that anything, you know, as it relates to top earners or just anything of that sort.

Uh we had a meeting of members that was uh you may have watched uh a couple weeks ago where members taught the entire meeting was talking about um revenue proposals.

That does not mean a majority supports revenue proposals.

As I noted before, I think the chances of a majority supporting raising taxes goes up if the chief financial officer gets his way, which I don't intend.

Um the um the ideas range from um I'll say a surcharge on income tax to a surcharge on passive income.

I think the passive income proposal, I was getting some briefing on it this morning, um, is a little bit more um uh has a bit more unintended effect than uh we realize um it uh would uh affect uh I I don't know all the details of this, but would affect uh the rental market because rents are passive income.

It's not clear to me whether it would affect uh a large rental company like uh Bernstein or W.C.

Smith, but for sure an individual resident who's renting out a second property would be affected by this.

So where do you currently stand on just raising?

I think that we should always keep the ability to raise taxes in our back pocket.

Um it has to meet a real need, not a want.

So some folks would say that um restoring the pay equity fund, which deals with child care is a need.

I think we can do that out of the 420 million dollars.

I think that the child tax credit is a want.

That's just to give you examples.

I think the child tax credit, by the way, is an excellent proposal.

So I guess so you say it's just in the back pocket, so like what what would be a need under what circumstance would you employ it?

Well, I'm afraid there's not a bright line here, it's a subjective analysis, but uh it's a balancing of what are we doing with the um what are we doing with the taxes that we need the tax increase that we need to do?

So I think that there are some advocates who have been pushing for raising taxes because it's like just in their DNA that they're gonna keep push every year.

We the same folks say the same thing, you know, now is the time we need to increase taxes.

Um we have to be mindful of what the uh effect of that is or could be uh can you say more about the surcharge tax on passive income proposal?

Not really because um and who's proposing these were not my proposals.

So which one?

Who is proposing it?

On which one?

The surcharge tax on passive income.

Um Councilmember Nadeau has been the most outspoken about it, uh, but I would not say she's alone.

Is there like general traction among the council members on a proposal like that if for whatever reason you guys can't access these reserve funds?

I hope not.

Martin.

All right.

Two last ones.

One related to this one on.

I would never say the two last ones, because then if you think of another one, I'll disqualify you.

Fair enough.

Um given that you're again going through a budget season where tack proposed tax increases are coming up somewhat at the last minute.

There's no public hearing for this process.

There's no kind of at least public assessment of the pros and cons of these things.

Does this make you think that either a the council should reinstate a commission a committee that would deal specifically with revenue raisers or just tax changes broadly?

Or is there something you guys can do to make sure the tax revision commission just gets the work done that it was supposed to have done a couple years ago but never finished?

Neither.

So the tax revision commission, no, let me start with this.

Um, you know, people seem to think, and this is implicit in your question that somehow there's a magic committee of the council that can magically figure out um some thorny question.

Uh sometimes committees do that.

Uh committees develop expertise, however, um the quality of a committee varies from committee to committee.

I think you know that you've seen that, Martin, and um also varies from year to year.

So I think you have to look at who would be chair of that committee, and I don't know why a um uh tax revenue revenue committee is the solution here.

Actually, what we have done, I think four times in the history of home rule is to create a tax revision commission, which we did a couple years ago.

That commission had a life of one year, so it's now out of existence.

The idea is not to have a permanent commission.

I'm not sure what that would do.

What the tax revision commission tried to do was to come up with a comprehensive package of um that would increase some taxes and lower other taxes and try to come up with a more equitable tax system.

For instance, uh, and this was maybe the most controversial was to broaden the tax base of uh business taxpayers and in return lower some of the business taxes, like eliminating the personal property tax.

Some folks have forgotten that uh since then, and so they've cherry picked recommendations like this business activity tax, which was meant to pay for other business tax reductions or eliminations.

They they kind of forget that in the talking.

Umfortunately, there were some um appointees to the uh commission, not by the council that um just argued and uh prevented the commission from getting to an agreement, so it never issued recommendations, which is unfortunate.

So we all have their draft proposals and the background papers, and what we've seen is that uh people have been cherry picking the revenue raisers and ignoring overlooking, discarding the um the um tax uh what I was eliminations or reductions, but the idea was that the revision commission would come up with a comprehensive package that would be more equitable.

So we did in 2013.

All right, and last one, and you can hold me to this one, I promise.

Um, separate from the budget.

There's currently, I'm sure you've seen because they're out in force on Capitol Hill, they're out at Eastern Market yesterday.

These folks were circulating petitions for a ballot initiative that would ban foie gras, the sale and production of Ford Grand DC.

I'm just curious if you have any perspective on whether foie gras should be banned in the district.

I don't know if you're a fan of the product or regularly eat it yourself, but just curious.

Uh I do not regularly eat it.

Um I have not taken a position on the initiative.

I will say this.

I do subscribe to the theory that when it comes to candidates wanting to get on the ballot.

I believe in ballot access, so I will sign almost anybody's petition, including people who are running against me.

Um when it comes to issues, uh, I think that uh people should be more discerning, and if they don't support the issue, they should not sign the petition.

Uh just a couple more questions, Sam.

Who are you supporting in a murderer race?

I have not uh publicly endorsed.

Well, I mean, you haven't, but who is ours?

You must have gone to reporter school.

Uh so my answer will be the same.

So I am supporting in the uh special election.

Oh, yeah, yeah, obviously.

Yeah, we've seen that.

So I mean, what's the stake for the council, you know, in terms of its relationship with the executive?

Um there's no question but that they're gonna be new relationships.

I mean, Mayor Bowser's been the mayor, the um the head of our co-equal branch for the last uh 12 years, and um that's gonna change.

And I think most members probably do not appreciate that what all that involves.

Um there's gonna be delay in a lot of stuff that we're used to happening more timely because it's a new mayor who's getting his or her footing, and um we will see how cooperative uh collaborative I should say he or she will be.

I am hopeful that whoever wins uh is very collaborative with the council because we are partners.

I mean, what's your take on just how the council is sort of members of the council are coalescing around the two front runners?

You know, what what's your take on that?

Um, well, that's not surprising that because that's what front runners are about is to call us around front runners.

And what does that say to you about the direction that the council has gone in in recent years, or just I'm asking this in the context of the of course, the curfew um not being voted on this time, and former council member McDuffie making this call to the council last week uh to work on that.

I'm asking that question in the context of it.

Um as of recently, some people would say that these two candidates are on different sides of a spectrum, um, ideologically for whatever reason.

But I just wanted to get a sense of, you know, from what you've been seeing in terms of endorsements, how does that speak to the direction that the council has gone in, you know, over the last um over the last few years?

Yeah, I'm not sure how to answer that.

And I think uh if what you're getting at is what the council will be like next year, or what the government will be like next year, I think it's too soon to say.

It's not what I was getting at, but okay.

I'm not sure I'm gonna have a better answer.

The endorsements by council members of the mayoral candidates, yes, sir.

It seems like there's some fault lines.

Uh maybe.

I don't know that I would argue with you on that.

Why wouldn't you?

Because I don't feel like it.

Plus, I'm getting a note that I um need to wrap this up.

Come on, you gotta give us something, you know.

No, I'm not gonna give you anything.

You know, fault lines, like, you know, you see I love all my colleagues.

Is there an endorsement coming anytime soon?

Uh in the special election.

I mean, of course, I've seen that, but as far as the mayoral race, anything.

I'm not planning on it.

All right, no question.

Thank you.

Uh, if there's nothing else.

Thank you all very much.

See you tomorrow at uh eleven o'clock.

I think there's a breakfast beforehand.