D.C. mayor grows fearful of federal standoff

Mayor Vincent C. Gray warned Tuesday that a drawn-out federal shutdown could lead to crisis in the city — a stark change in tone from his portrayal last week of a District government going about its business amid congressional dysfunction.

The shift came as the clock ticked on Gray’s strategy of tapping a special budget reserve to fund city operations during the shutdown and as news emerged that the District had been forced to put off many of its financial obligations since the shutdown began.

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In a letter Tuesday to President Obama and top congressional leaders, Gray said “there will be severely negative consequences for us” if the city’s spending needs outstrip the reserves.

He suggested for the first time that public safety could be placed in jeopardy, citing federal grants “essential for the continued protection of strategic and high-visibility targets” that have been placed on hold while the congressional showdown plays out.

He also said the shutdown has forced the city to miss a $74 million payment to Metro and could interrupt a scheduled Oct. 29 payment to the city’s 60 charter schools, “many of which will be unable to absorb this blow to their finances.”

The $145 million Contingency Cash Reserve Fund is unlikely to support city government functions much beyond Tuesday, when $98 million in employee paychecks are due. City officials have debated in recent days whether as much as $513 million in additional reserve funds might be available — extending the status quo several weeks should the shutdown persist — but no determination has been made.

“In no other part of our country are Americans facing the loss of basic municipal or state services due to the federal government shutdown,” Gray wrote Tuesday to Obama, Senate Majority Leader Harry M. Reid (D-Nev.) and House Speaker John A. Boehner (R-Ohio), demanding face-to-face meetings to plead the city’s case for an exemption from the shutdown.

The District government is affected by federal shutdowns because, unlike the states, its budget is appropriated by Congress. Those appropriations — even of locally generated tax revenue — have stopped.

The federal shutdown is now the longest the city has faced. A 1995 shutdown affected the District for five days, and the city was exempted from a subsequent 21-day shutdown that stretched into January 1996.

There is little expectation that the District will receive a reprieve this time.

A Gray administration official who is not authorized to comment publicly said the mayor had spoken to Obama adviser Valerie Jarrett last week, urging the president to support and sign a D.C. funding bill. The Republican-controlled House passed a bill last week that would fund the D.C. government through Dec. 15. But the administration and Senate Democrats have held fast to a no-small-bills strategy and shown no indication of making an exception for the District.

In his letter, Gray said he had “done all that I possibly can to ensure that the health, safety and welfare of District residents is not endangered by a crisis that our city has had no hand in creating.”

”But time is running out,” he continued, “and, soon, I will have exhausted every resource available to me to protect our residents, our workers and our visitors.”

Although all city employees have remained on the job and most residents have seen no change in the day-to-day operations of city government in the past week, a wide variety of District government payments have been suspended to conserve the city’s cash.

Last week, health officials announced that the city would not make $89 million in Medicaid-related payments. The city’s tax office said Monday that refunds would cease for the duration of the shutdown. And a variety of other payments, from federal Homeland Security grants to legal settlements, have been frozen as well.

The missed payment to Metro is part of the $1.6 billion annual operating budget for buses and trains in the region, which are funded by fare revenue, federal grants and subsidies from the District, Maryland and Virginia.

Some transit officials worried Tuesday that the $74 million gap could lead the agency to cut back service, but Metro spokesman Dan Stessel said there is no “immediate issue” with service to passengers and said officials are “closely monitoring” the situation.

David Umansky, a spokesman for Chief Financial Officer Natwar M. Gandhi, said decisions on paying the city’s debts during the shutdown must be approved by City Administrator Allen Y. Lew.

Lew’s office did not provide an accounting of authorized payments in response to inquiries from The Washington Post dating to Friday. Spokesman Tony Robinson said that there is “not an official list” and that city agencies’ requests are being dealt with on a case-by-case basis.

A city official not authorized to comment publicly said checks have been cut for some obligations, such as rent payments, that could trigger burdensome contract provisions, such as fines or eviction. Most welfare and disability payments have also been made.

D.C. Council members said Tuesday the Gray administration has been too stingy in its explanations of which bills the city is paying, which ones it is not and how long it can continue going as it has been.

Council member Jack Evans (D-Ward 2), who chairs the Finance and Revenue Committee, said he did not learn until Tuesday that mayoral officials had been meeting privately with Gandhi’s staff to determine what would be paid and whether the city could find additional resources to continue operating after next week.

“I’m outraged — outraged — that we have not been consulted,” Evans said.

City officials familiar with the internal deliberations but not authorized to comment publicly said a debate has brewed since late last week over whether additional pots of money might be available during the shutdown.

There is general agreement, they said, that a $110 million Emergency Cash Reserve Fund, intended for natural disasters or other urgent circumstances, would be available should Gray choose to declare a state of emergency after the contingency fund is exhausted. More controversial is a bid to tap an additional $403 million in other reserves — a move that has been pushed by Gray’s budget staff but would require D.C. Council approval and has been treated skeptically by city lawyers.

Emma Brown and Dana Hedgpeth contributed to this report.

 
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