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Posted at 12:38 PM ET, 02/14/2011

Kwame Brown addresses budget plan, United Medical Center sale

By Mike DeBonis

Kwame R. Brown, fresh off his first meetings with Wall Street bond raters as D.C. Council chairman, attempted to affirm his commitment to fiscal rectitude on television this morning as the government begins to plug a budget hole reaching into the hundreds of millions of dollars.

Brown (D) said on NewsChannel 8 that he, Mayor Vincent C. Gray and council finance committee Chairman Jack Evans (D-Ward 2) have "committed not to dip into reserves" to representatives of the three major rating agencies on Thursday. Evans made similar comments to the Washington Examiner.

That would be a departure from the last two city budgets, which spent down the city's savings to offset recession-related revenue shortfalls.

Brown appeared to make news when he told host Bruce DePuyt that closing the gap, which some mayoral sources estimate at $600 million or more, "can't be done with cuts alone" -- signaling his willingness to raise taxes on District residents.

But pressed by DePuyt, Brown refrained from explicitly saying he was pro-tax-hike, retreating to old talking points about how the city needs to collect money its owed, then look to cut programs for savings.

"It's clear that this can't be done with cuts alone, and it can't be done with revenue enhancements alone," Brown said. "There's a possibility that there could be both. "

Brown also discussed the fate of United Medical Center, the long-troubled Ward 8 hospital that the District has been running since July.

Gray has made a power move in recent days to take control of the hospital's board, which is widely seen as a prelude to forcing a sale -- a sale, Gray has said, that would please bond raters.

Brown seconded those themes. "They are interested in some sort of exit plan," he said of the raters. "We made the commitment not to be in the running-a-hospital business. ... They were concerned that no municipality has been able to successfully run a hospital."

He added he was concerned that the city not have "another D.C. General" on its hands -- a reference to the charity hospital that represented a massive drain on the city budget before its 2001 closing.

The UMC saga stands to get politically messy, with Health Committee Chairman David A. Catania (I-At Large) fighting tooth and nail to keep the hospital under city control for several more years, stabilizing it to the point that a blue-chip hospital chain would be interested in acquiring it.

The debate has gotten personal. Recent hospital dealings have been suffused with allegations that a prospective buyer, businessman George Chopivsky, hired a well-known D.C. lobbyist with close ties to the District's highest officials to promote a quick sale.

Linda Mercado Greene has a close personal relationship with Gray, and she is an old family friend of Brown's. In June, Greene resigned from the campaign of Brown's opponent in the chairman's race, Vincent Orange, saying that Brown was "part of my family."

On television today, Brown lauded Catania's longstanding crusade to save the hospital. "Council member Catania has done a phenomenal job," he said. "No one has been playing the point more than him."

By Mike DeBonis  | February 14, 2011; 12:38 PM ET
Categories:  David Catania, Kwame Brown, The District, Vincent Gray  
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Damn David Catania, sale that hospital now, the city cannot afford to effectively run it without running ourselves into bankrupsy. This seems like so much the no brainer to me.

Posted by: concernedaboutdc | February 14, 2011 3:44 PM | Report abuse

I would assume that David Catania is afraid of getting burned again. We have sold the hospital twice. Once during Anthony Williams administration to someone who bled it dry and then again when David supported the sale to the last buyer of Greater Southeast, now UMC, and the city was burned again. That sale was supported even though Gandhi said there were serious finacial issues with the buyer which the Mayor and David disregarded.

So while I am for selling the hospital as quickly as possible I agree with David that we do need to be careful this time to vet the buyer thoroughly or we will only have it back again in a couple of years and have lost more money on it.

This whole process should be open and transparent or the people of the District who are paying the cost of past mistakes will lose again.

Posted by: peterdc | February 15, 2011 10:49 AM | Report abuse

Before raising taxes, Mayor Gray and the Council MUST MAKE A CONCERTED EFFORT to collect business taxes that are already on the books and eliminate fraud, waste, and abuse already identified by the executive and legislative branches namely through the DC Auditor and Office of the Inspector General (OIG) reports.

How can the gap of $400 - $600 million be closed?

1. $300m of unpaid, uncollected parking tickets. Establishing an amnesty program like the Office of Tax and Revenue has done recently can help recoup some significant portion of the $300m.

2. Collect $20m per annum from the possessory interest tax to businesses. Approx. $25m was uncollected in FY10. CM Evans proposed allowing Union Station get a $34m freebie. DC needs to enforce the law and collect. Tell CM Evans to implement effective oversight.

3. Reign in overtime at Dept of Public Works (DPW), Fire & Emergency Services (FEMS), Office of the Chief Financial Officer (OCFO) and other wasteful, abusive agencies. The city auditors, namely the OIG, have researched the abuse and fraud by dept managers when approving overtime. While overtime is necessity it is not an entitlement that employees should expect to supplement their base salary.

4. Eliminate fraud by removing VA, MD residents off the TANF and food stamp rolls through more stringent residency verification controls.

5. Eliminate waste by ceasing the practice of housing the region's homeless during hypothermia and throughout the year through more stringent residency verification controls.

6. Eliminate waste by installing motion lights in all DC buildings that are on 24hrs-7days per week, especially in the bathrooms. Private sector commercial buildings implement this green, cost-effective approach to save on costs.

7. Enhance efficient gov't workforce development by completing jurisdictional comparison of city employees per capita (e.g. target the Office of the Atty General employees, MPD civilian, non-patrol service employees, OCFO, etc). Indeed DC has state functions but how do we compare to Delaware, CT, RI and on other states on a per capita basis. Currently, the DC gov't has about 20 employees per resident and that excludes contract employees. Mayor Barry expanded DC gov't. How much should it contract? Mayor Fenty eliminated 3,000 reportedly redundant, non-crucial positions. How many will Mayor Gray eliminate?

These are just a few of many ways to close the gap before raising taxes.

It's a fact that Mayor Fenty and Chairman Gray submitted an OCFO-certified balance budget for 4 years. We'll never know what budget Mayor Fenty might have proposed for FY12.... Regardless, raising taxes without performing due diligence is the lazy approach that the DC government should not take. And taking such an irresponsible approach is not deserving of the $100K+ salaries Council members and high-level executive branch receive...from taxpayer dollars.

Posted by: jmc39 | February 18, 2011 5:05 AM | Report abuse

Why is Mr. Brown tinkling with the DC budget? According to previous WPO articles, he can't handle his "own" business. Why the folks in wards 7 & 8 voted for this chump is beyond me.

Posted by: Pennie147 | February 20, 2011 12:08 PM | Report abuse

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