Good afternoon, Chairman Mendelson, members, and staff of the Committee of the Whole.
I am Kevin Donahue and I have the privilege of serving as the City Administrator. I am
joined by Jenny Reed, the Deputy City Administrator and Budget Director. On behalf of
Mayor Muriel Bowser, I am pleased to speak on the Fiscal Year 2025 Annual
Comprehensive Financial Report, better known as the ACFR.
This morning at the Mayor-Council breakfast, the Mayor and I spoke at length about the
significant challenges we face as we formulate the FY 2027 Budget. Since we’ve already
spent a few hours discussing the District’s financial outlook, our efforts at controlling
spending, and the need to employ greater financial discipline, I will give a few brief
remarks and then we can proceed to questions.
Under the Mayor’s leadership, the District has continued making strategic investments,
which have maintained DC’s comeback and continue to show strong results. Despite this
progress, we face very serious financial challenges at the federal and local levels.
At the federal level, we continue to see the longer-term impacts of federal workforce
reductions and weakened commercial leasing. Federal tariffs and immigration policies are
resulting in higher construction costs and labor shortages. And the congressional effort to
overturn the Council’s emergency legislation on decoupling from the One Big Beautiful
Bill law will greatly complicate our budget planning over the four-year financial plan.
At the local level, we have numerous programs whose growth is expanding far beyond our
capacity to pay for them. I have repeatedly raised this issue and the bottom line remains
the same: The District cannot afford this rate of spending.
We must continue to grow the District’s economic base and our investments must be
strategic and prudent. All of us – the Executive and the Council – will need to make very
tough choices in the upcoming budget.
I will conclude my remarks by thanking Deputy City Administrator and Budget Director
Jenny Reed, Chief Financial Officer Glen Lee, Inspector General Daniel Lucas, and the
independent auditing team at Clifton Larson Allen. It has taken a tremendous amount of
hard work to get us to where we are today, and I appreciate everyone’s hard work and
dedication.
Chairman Mendelson, thank you for the opportunity to discuss the Fiscal Year 2025 ACFR.
We can respond to any questions.