Good morning.

The um I'm Phil Mendelssohn, and this is the press conference that uh I have before a legislative meeting, a regular legislative meeting, and tomorrow, June 30th will be the regular legislative meeting for the month of July.

I know tomorrow's June 30th, but we actually uh have the regular meeting on the 30th and an additional meeting on the 14th of July, and then the council will be on recess, which only means that there won't be hearings or legislative meetings, but uh members will still be working.

We have a committee of the whole meeting uh to precede the legislative meeting.

There's not a lot of business tomorrow because uh we have beginning with June 2nd had a legislative meeting every Tuesday except for the 16th.

Uh so the business there's not a lot of business for tomorrow.

The committee of the whole will be marking up one measure uh that's to make an appointment to the Uniform Law Commission.

The uh other committees are four confirmations to the Board of Pharmacy that came out of the committee on health.

Nine uh confirmations to the commission on human rights, it came out of the committee on public works and operations.

I'm not going through everything that's on the agenda, but um I will note that one bill that came out of committee on public works and operations that will be getting a lot of attention, if not tomorrow, then at second reading is the resale act, which is the full name is Restructuring and Gregio Scalping Against Live Entertainment Amendment Act of 2026, which is attempting to deal with um ticket scalping and very high prices in the resale market for tickets, uh, as well as difficulty that uh consumers have getting tickets on the primary market for events.

Uh the legislative meeting will have all of the measures that come out of the committee of the whole.

There are a few contracts.

I don't think there's anything controversial there.

Two of the contracts are school, uh school uh food service, uh one with error mark and the other with Sedexo Magic.

There are three uh vendors.

I have to refresh my memory why the third is not coming before the council, possibly because it was passively approved.

Um so looking at emergency legislation, there are three measures.

The comprehensive policing and justice reform technical emergency is just a re-upping of legislation previously approved.

The entertainment establishment employee safety extension deals with creating an exception to the law that says that um retailers have to accept cash, making an exception for certain restaurants.

When I say certain, I think they have to be open um very late at night.

And uh I think also our have a alcohol license if I remember correctly, and then if they meet those criteria, they could be exempt from the cash requirement, which is the policy in the district that all retailers have to accept cash from patrons, uh recognizing that there's a significant portion of the population that's unbanked or underbanked.

Uh the third emergency measure is public service commission holdover period extension, which will extend for two of the members of the public service commission their term, additional, I believe it's six months.

Um, so their terms are up June 30th.

Ordinarily they would be able to hold over for six months.

This will uh allow additional time so that the new mayor can decide what she wants to do with regard to these appointments.

Uh, that in a nutshell is tomorrow's committee of the whole and legislative meeting.

Happy to take questions on that or anything else.

Mr.

Seagraves.

Chairman, thank you.

Um I have a couple of questions.

One uh uh on the resale act.

If I can ask about that, do you support bringing the cap back in?

Do you expect the cap to be brought back as an amendment and and do you support that being added back into the legislation?

Um I have not decided exactly where I am on that, and the reason is because I've heard arguments for and against that um having a CAP could uh drive ticket sales uh on to other markets that are harder to uh regulate, and um uh on the other hand, uh it's an effort to try to control the um how much the price increase is on tickets.

So I haven't decided where I am.

I'm not sure that amendment will be moved tomorrow.

Uh but at the moment, it's clear to me that if it's not moved tomorrow, it will come up at second reading.

Uh the mayor has put forth uh an interim and inspector general.

And I'm just wondering, given that we'll have a new mayor in a matter of months, do you expect to confirm if she puts them up for confirmation to the full term, or do you think that that's something that should be delayed so that the next mayor would have an opportunity to make that appointment?

I'm comfortable with making confirmations through uh the remainder of Mayor Bowser's term.

I I realize that mayor mayors elect always want uh the council to pause to give them an opportunity, uh, but then that just means delay with regard to um boards and commissions or even agencies where there's uncertainty who the leader will be.

Uh and then uh two more topics.

I appreciate your indulgence.

Uh do you want to weigh into the statements from first uh President Trump uh regarding uh council member Lewis George, the presumptive, well the democratic nominee at least for mayor, uh his comments and then her uh statement going back at him, like what your thoughts on what this means for DC residents kind of stuck in between this?

Uh I don't appreciate the comments from the president.

Um I don't think it's appropriate for him to uh weigh in that way on uh local issues, whether we're talking about the District of Columbia or any jurisdiction, we of course are more sensitive to this because we uh value what limited autonomy we have and so it's more of a threat, or we're more sensitive to uh interference by the federal government, but it would be inappropriate wherever the jurisdiction.

If the president has concerns with regard to the democratic nominee, he should just contact her and sit down with her and talk with her uh and have a conversation and from there decide uh if there are issues he disagrees with rather than to just uh level the kind of blanket uh criticism that he did.

Should she and the rest of us take those threats from the president seriously?

Well, I think we have to take whatever the president says seriously, uh uh and my last topic and uh is on the personal seat licensing agreement.

Will you vote on that?

Will the council be voting on that tomorrow?

I don't believe that's on the agenda tomorrow.

So there is a events DC has put a uh price tag now of 975.

Have you seen this?

Are you familiar with the Mr.

Astermule with notices?

I'm not familiar with the details, but I recalled this from the negotiation.

So they put a number on it now for nine hundred nine hundred and seventy-five million dollars, the value of those personal seat license agreements for the commanders.

Uh the commanders have said they're gonna use that money to offset their investment of 2.7 billion dollars.

So this is a nearly billion dollar giveaway from the city to the commander's ownership that is the city's assets that at the end fans are going to have to pay.

So I'm wondering when I asked about personal seat licensing agreements when you were negotiating a better deal, you were somewhat reluctant to really weighed in.

But now we know the cost of them.

What do you say to DC taxpayers that are now learning that the district is prepared to give this team a 975 million dollar asset that is the city's, uh, and what do you say to the fans who now are learning that the seat licensing agreement could be on average of $15,000 and up for season tickets?

Well, first of all, I'm not sure.

I don't agree with your characterization that it's a giveaway by the district government.

Uh we knew when we negotiated the deal that there would be uh the personal seat licenses.

Personal seat licenses is a way of financing construction of stadiums.

This is not unique to the commanders or the district.

It's been done elsewhere.

Uh it's not government money that's going into the personal seat licenses.

The only only uh role that the government has, I shouldn't maybe I shouldn't phrase it that way.

The only cost arguably that the government has, which we contemplated last year, was that we would not be, I think it was charging tax sales tax on that.

Um that's the extent of what what it's costing, so to speak, taxpayers.

Um this is a mechanism that's been done in other stadiums.

Uh personally, I don't, I'm not one who would be going out and buying a personal seat license, but it's a way of getting a um block, if you will, on uh season tickets for a sports stadium.

And it's a way for a team, not just the commanders to finance to construction.

So first, if I may, um, did you know when you negotiated this asset away that it was going to be close to a billion dollars?

Did you have any estimate of how much money it was going to be?

Uh well, um the uh I think I heard you say that it breaks down to about fifteen thousand dollars a seat or a seat license.

I mean that's an average, so obviously some will be far less and some will be far more.

I was aware of that figure.

Not specifically, it's not like the commander said to me we're gonna charge 15,000.

But the overall number, the 900, it's nearly a well I didn't do the math.

So were you aware of that?

I was aware of the somewhere around 15,000.

And then when you say it's not costing taxpayers any money, it's it's an asset the district could be selling.

That could be 975 million dollars.

So so it is costing taxpayers 975 million dollars.

I'm sure the district could be selling them.

Why not?

The stadium my recollection from um last year's negotiations was that's that I say that from my recollection.

So when this does become before the council, the personal seat licenses are not a surprise.

It was part of the negotiations, it was part of the deal last year.

Uh specifically, there was a question about whether we were going to charge tax on it, and we did not.

But are you prepared to do any other uh amendments to this that would either limit how much they could be, reserve some season tickets that would not have personal seat licensing uh on them, reduce that cap.

This is the cap that events DC has come up with of 975 million dollars.

You could reduce that cap.

Are you gonna look at this or give public feedback at all?

I mean, this is something that is if if you don't, if you want to dismiss the idea that this could have been an asset for the DC government, the flip side of this is how much this is gonna cost the average fan.

Granted, we've known since day one it was coming to DC, and the majority of NFL stadiums already have this, have personal seat licenses.

But none of none of the teams in DC, this is going to be new to season ticket holders, and there are going to be seasoned ticket holders who are simply not going to be able to afford season tickets.

Sure, so but you're making a distinction there that I think is a little bit unfair.

So it may be that the nationals and uh the uh Audi Field uh doesn't do this, but uh other football stadiums do.

So it's not unique to the commanders.

That's true.

Yeah, you could say it's but this is something that football.

You still have an opportunity to put some protections in there for for the average fans.

Or are you protections or uh price controls?

Okay, you so uh I'm happy to freeze that.

You could put price controls.

You guys, that's not something that's unique to DC or other jurisdictions putting price controls on ones.

Well, this was not new, it's not new news.

This is old news.

It was we knew this last year.

We didn't know it, we didn't know it was gonna be nearly a billion dollars.

Well, I never asked them how many seats, but I did have a sense that it would be.

In fact, in my mind, I was like $25,000.

And then we're gonna have the same conversation when we learn the value of the naming rights.

Another gift, so the way this was phrased was the commanders remaining.

The commanders were putting up 2.7 billion dollars, and the district was putting up its one whatever billion dollars if I am I on track so far?

I think I am, right?

And this was going to be the investment, but now we're learning that the commanders aren't really putting up 2.7 billion dollars.

That's just not fair, Mark.

And the reason why it's not fair is guess what?

Selling tickets will help to pay for the stadium.

That's not new.

That that's true with every stadium.

Selling tickets is part of the income a team gets that helps to pay the costs of the team, which includes building the stadium.

There's nothing new there and the fact that they have personal seat licenses is not new and all of this we knew last year I I didn't know the number of personal seat licenses but the fact that they were going to sell them yes we knew that and that was very much part of the discussion last year because we're not charging tax on that that was part of the discussion but my last my last and I appreciate you indulging me on this but my so but you you gave you you negotiated away an asset that you now acknowledge you didn't even know the value of the asset that's not correct.

Did you know the value was going to be estimated at 975 million.

I think the value was going to be something like 25 thousand dollars per personal seat license I knew that but you so but let me remind you the the um the uh mayor negotiated a deal I don't really want to go down this path but the mayor negotiated a deal with the commanders she presented to the council she gave us six weeks to act on it we acted on it in eight weeks and we made the deal eight hundred million dollars better that's almost a billion dollars better for the taxpayer that's what we did the council did we made it roughly we made it roughly 800 million dollars better for the taxpayer um so I kind of look at it in that context that we knew about the personal seat licenses we knew about all the money that the city was going to be putting into it and the council was able to claw back roughly 800 million dollars in benefits for taxpayer from this and let me remind you as well that when the mayor announced this there were a whole lot of people who supported the mayor's deal as she proposed it and there was a whole lot of pressure on the council to adopt the mayor's proposal as the mayor proposed it without change if you want I'll share with you the emails the many many many emails I got that said vote on this without change vote on it now.

Remember the mayor wanted us to vote on it at the first reading on the budget July 15th so I appreciate Mr.

Ostermule Mr Seagraves has gotten me warmed up here.

He's done that for all of us back on the the appointments issue of boards and commissions and whatnot so MPD chief Jeffrey Carroll is now it's been beyond the six months he's been serving in an interim capacity I asked the mayor two weeks ago if she was going to nominate him for a permanent post and she didn't much answer the question my assumption is she just won't where does that put you guys because again you're in this awkward situation where there is a mayor elect coming in who wants could potentially want to go in a different direction but you also have an acting an interim police chief who is still being paid as the police chief even though the law says he can't be paid as a police chief after those six months and this is not the only I mean there's the director of DPW has been at this for two years the director of the I think office of chief medical examiner has been in an interim capacity for like four years.

And the council hasn't done anything about it even though it's the law that something has to be done.

I do not have a good answer for you.

That's it you just don't have a good answer correct have you expressed displeasure with the mayor over this that you I mean this is the council's one power is that you guys not recently okay if these were uh agencies that were directly under my oversight uh I would be definitely agitating on this so you're blaming the council members who have oversight of these agencies I think I'll just see my why do you have to be chairman of a committee to your chairman of the council why would you have to have oversight of these committees to flex your muscle on this or express your your opinion I don't have a better answer for you.

Wow.

Just a reminder BSA is not is not tomorrow.

It's not on the agenda is it to the seventh or is it on the 14th right now we're we're planning on um second reading on the budget support act on July 7th.

Okay.

All right.

Thank you.

Which means the documents will circulate, I think on Thursday.

Uh no, the notice will circulate on Thursday.

The documents will circulate because there'll be an amendment in nature of a substitute on Monday, next Monday.

Mr.

Rice.

Is there any update on the state of negotiations between you and the council and the CFO on the budget and the money that he says you shouldn't be spending?

Well, update depends on your reference point.

So the council has adopted the budget.

We are done with the budget.

Um we do have the budget support act, but there's that's not an appropriation.

In the budget, we uh appropriated 150 million dollars from one of the reserve funds to um support uh some of the operations.

Uh we generally do not do a straight line between a revenue source like the fiscal stabilization reserve and an expenditure, but I will note we put 100 million dollars into workforce investment account, and uh other big ticket items that we were able to fund were the pay equity program and the child care subsidy pay equity, the two together were something like a hundred and six million dollars as I recall.

Um a year ago, one year ago when we adopted the budget for fiscal year 2026.

Our reserves were equal to 52 days of operating costs.

Uh as of September 30th, our reserves were equal to 60 almost 66 days of operating costs.

The 150 million dollars that we're using brings the reserves down to about 62 days.

The gold standard is 60 days, so we're above what the best practice is, according to the Government Finance Officers Association, GFOA, above what they recommend as the best practice.

Um I will note as well that ratings agencies, which we are perhaps more sensitive to than we need to be.

Um Moody's issued a report in April that said that um they would not be concerned unless our fund balance was less than 15 percent of revenues, we're above that.

So, terms of what Wall Street has indicated, we're in perfectly fine territory.

In terms of what government finance officers recommend, we're in fine territory.

I'll note as well, just because if you want to look at our financial uh situation compared to other states, I think we are the only jurisdiction in the country that has 100% funded pension, 100% post-employment uh benefits uh fund.

Um, so in terms of those liabilities, we don't have them.

The reserve funded issue is a reserve fund that the council set up.

We set it up when Vince Gray was chair of the council.

Um, and uh we set what the limit was in there, how much money should be in there.

So we're completely within our authority to make an adjustment in terms of how much is in there, and the adjustment in the scheme of things is less than six percent of the total reserves.

Um it's really a small adjustment.

Um your question is premised on the fact that the chief financial officer has objected and said this is unwise.

The best explanation I can get from him as to why it's unwise is that he's concerned about liquidity not this year, not next year, but in 2028, and um I'm firmly convinced that the chief finance officer has within his means the ability to manage cash flow so that we don't have a liquidity problem two years from now.

But I will add the council stands ready to help in any way.

If there's legislation required in terms of smoothing uh payment obligation for payments that uh we the council will be right there to to help.

That's the update.

Well, that's quite a list of things on your side compared to his side, which is uh speculating two years from now.

Do you think um in other words you think he's just being too conservative is that a fair sense well I you know I stood at this podium actually in a different room a couple months ago and I said that the chief financial officer is hoarding cash and um we can look at different aspects of the budget like um the debt service account which is a um line in the budget that he determines how much needs to be set aside for debt service and for fiscal years that ended last September uh that was over budgeted by like a hundred million dollars maybe a hundred and twenty million dollars um it was in fact a lot of that money we know that because a lot of that money was reprogrammed in the thirteenth month of the fiscal year to cover overspending in agencies because the chief financial officer was not doing more to control agency spending to require that they spend within their budgets you know this has been a problem in the government for a while that agencies that overspend all is made well by reprogramming at the end of the year and then nobody's guilty of uh anti-deficiency act violation because with the reprogramming their budget was adequate uh that's a shell game that in my view is completely unacceptable so that's another way that um the CFO has some control over cash uh in fiscal year twenty twenty five the um our budgets have to be um formulated based on the February revenue estimates and the re February revenue estimate that uh was the basis for the FY25 budget was off by eight hundred million dollars that is the underestimated revenues by eight hundred million dollars the year before he underestimated by six hundred million dollars um the um so they're yes if you uh conservative I would say yes and you know there's nothing wrong with being conservative to a point but these are taxpayer dollars that we collect either for services well that we collect for services um and yes we should have reserves but uh we should not be just banking taxpayer dollars thank you any other questions we have committee to hold at eleven o'clock tomorrow morning yes there is a breakfast tomorrow thank you all very much