No changes planned for D.C. government as shutdown enters third week

October 14, 2013

Talks continue inside the Wilson Building about tapping more reserve funds. (Jonathan Newton/The Washington Post)

The third week of the federal shutdown begins at midnight, and despite warnings that the reserve funds the District government has been relying on will soon run out, the status quo reigns for city residents and employees.

That means D.C. government employees will report to work Tuesday — offices will be open and services will be available — but outgoing payments continue to be handled on a case-by-case basis.

Workers will receive their paychecks as usual Monday and Tuesday, on the usual schedule, but city officials are at this point not guaranteeing their Oct. 29 paychecks will arrive on time if in fact the congressional impasse continues for another two weeks.

That places city employees in the same boat as “essential” federal employees, who are continuing to work but with no promise of when they will end up getting paid for that work.

But there continue to be behind-the-scenes talks about tapping other pots of reserve money, which could fund at least one more round of payroll as well as other crucial payments that are expected to come due in the next days and weeks.

The reserve funds in question — the “Cash Flow Reserve” and “Fiscal Stabilization Reserve” — are mandated by District law and together contain roughly $400 million. City officials familiar with the talks but not authorized to speak publicly say there is general agreement that at least some of those funds can be used to backfill the Contingency Cash Reserve Fund that is now being used with the full blessing of government attorneys.

However, lawyers under both Attorney General Irvin B. Nathan and Chief FInancial Officer Natwar M. Gandhi have not yet given their final approval for using the other funds, the officials said.

Pedro Ribeiro, a spokesman for Mayor Vincent C. Gray, acknowledged there could be more money available. The existence of nearly a half-billion dollars in the reserve fund would seem to undercut Gray’s portrayal of a city in crisis, but Ribeiro said it won’t lessen the pain even if the additional hundreds of millions of dollars can be tapped.

“We’ve been very judicious with the money we do have,” he said.

Also still to be tapped is a $110 million Emergency Cash Reserve Fund, which is available only as a last resort and would require the mayor to declare a state of emergency.

“We call it the break-the-glass money,” Ribeiro said. “Once you do that, that’s it. It’s the end of days.”

What does not appear to be on the table is a move advanced by the D.C. Appleseed think tank, whereby the effective date of the budget autonomy referendum passed by voters in April would be moved up from Jan. 1 to Oct. 1 through an act of the D.C. Council. The officials say Nathan continues to be skeptical of the ballot measure’s legality, and the mayor and CFO are at this point not willing to to contradict his stance.

In any case, with huge bills to Metro and Medicaid providers now overdue, and with another huge bill to charter school operators coming due soon, all parties are hoping for an end to the Capitol Hill stalemate soon — at least with respect to D.C.

“Fifteen minutes of the U.S. Senate’s time would resolve all this,” Ribeiro said, referring to the lack of upper-chamber action on a bill to fund the District government passed by the House shortly after the shutdown began.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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Mike DeBonis · October 14, 2013