Correction: A previous version of this blog misstated the estimated cost of staffing the parade. It is $116,000, not $161,000. This version has been corrected.

Wednesday’s Emancipation Day parade will proceed as scheduled, a spokesman for Mayor Vincent C. Gray said, marking an end to a funding dispute that threatened to cancel the annual spectacle.

An agreement was reached Tuesday between Gray (D) and D.C. Council Chairman Phil Mendelson (D) allowing city agencies — including the police and fire departments — to absorb the estimated $116,000 cost of throwing the parade this year. But in future years, Gray spokesman Pedro Ribeiro said, the mayor, not the council, will be in charge of planning and executing any Emancipation Day festivities.

In recent years, the yearly Emancipation Day celebration has largely been the production of D.C. Council member Vincent B. Orange (D-At Large), who championed legislation in 2005 establishing the commemoration of the 1862 freeing of the District’s slaves as a public holiday.

Last year, the council spent $250,000 on a town-hall debate, concert and parade; this year, the council has budgeted $350,000 for a similar suite of events. But in both years, prepared budgets did fully not cover the city’s expenses in holding the parade, including police and firefighter overtime. Those costs were absorbed within those departments’ budgets, leaving them with less spending flexibility later in the fiscal year.

The failure to budget for those expenses came to a head last week when Gray’s chief of staff, Christopher K. Murphy, threatened to withhold city services for the parade unless Orange’s office could show it could cover those costs. Because Orange had expected the city to absorb those costs rather than include them in his budget, the dispute threatened to cancel the parade.

Orange said Monday that he and his staff had been working with city agencies on the parade for months, and the mayor’s office only took the position last week that all parade costs needed to come out the council’s budget. “If that precedent was going to change,” he said, “that should have been brought forward earlier.” But the mayor’s office disputes that contention: “From the very beginning, they were told that they would have to incur these cost,” Ribeiro said. “Whether they were listening or not, I can’t answer that question.”

In future years, Ribeiro said, there will be no such understandings. “The council will be no longer be running this event, as it has become clear there have been too many issues,” he said, adding that if Orange wants to maintain the prime role he now plays in the holiday’s planning, “He’d have to talk to whomever the mayor is in 2015.”

Orange said Tuesday he’s just fine with that arrangement. “I’m glad they’re at the point that they realize that this is a government holiday,” he said. “This is an obligation of the government and not the legislature. … This is not a Vincent Orange event; this is a District government event, and they should treat it in that fashion.”

The parade, which runs down Pennsylvania Avenue NW from 3rd Street to 14th Street, is set to kick off at 11 a.m. Gray will be marching, Ribeiro said.