you've attended Council hearings in person you tuned in to our televised proceedings on channel 13 now you have the chance to listen to us on the radio as we demystify our work and the people who do it this is not a council hearing this is hearing the council with your host Josh Gibson thank you deep voice person funky BackBeat indeed this is not a Council hearing this is hearing the council you can't have a government without a council so you can't have a government radio station without a council show this is it I'm Josh Gibson director of communications for the council you may also know me as the council's voice on social media at Council of DC uh and today we have the extraordinary uh Good Fortune um to be joined by the chairman of the council uh Phil Mendelson um welcome last time you didn't say it was good fortune but thank you and thank you for having me speaking of the last time the last time was in April of 2023 why you tell me why you haven't called me I've been by I've inviting you multiple times all council members are invited every time an invitation is issued some respon that could be the problem that you invite everyone else and I'm just left to sit by the phone it's very lonely yeah yeah well anyway don't be a stranger hopefully we won't have to wait another uh whatever well we'll we'll see if you invite yeah we'll see we'll see how this goes are are you familiar with the show uh the internet uh videos called Between Two Ferns uh yes didn't Barack Obama Obama do something uh on that show or about that show he did he did many other celebrities politicians have gone on it and someone described your interviews on this show as having a strong uh Between Two Ferns uh vibe to them because they's sort of a simultaneous uh respect and flavor of disrespect all you know caught up together so we we'll see if we live up to that um to that standard yes or maybe I'll just get taken away from you and next time I'll be on Between Two Ferns and um you can just eat your heart out yeah i' I'd pay to watch that um so uh our theme for today's interview is the budget um and it I think it's fair to say that this was a budget season unlike any other uh we had the very rare uh situation of a late budget submission the council passes a schedule when the budget is to be submitted um which triggers that the uh home Rule Charter imposed deadline for when we have to pass the budget by um and For the First Time In My Memory uh the budget was not submitted on time so can you talk a bit about the um what happened behind the scenes and why the the schedule went sideways for the budget uh this year yeah yeah so to be clear when the pandemic hit in 2020 uh we did delay the budget but that was by mutual agreement and we waited for revised Revenue estimates before working on the budget and in 2021 it was delayed again again by mutual agreement this time was not by mutual agreement um I can't explain why other than that the mayor uh did not get the budget to the CFO in time for the budget books to be prepared and submitted to the council so um we got the budget April 2nd it was due March 21st or 23rd and uh that that was pretty at the time it was pretty annoying uh at today as I'm speaking to you it feels like ancient history since we got the budget eventually and worked on it and got it passed okay and what was the mayor's stated rationale for the delay uh if if I knew I don't remember but I'm not sure she's she stated okay wasn't it having to do with the um the uh meeting the budget reserves meeting the budget reserves and the last minute call by the CFO to hit several budget reserves now that you mentioned it uh she might have said that but that was one discrete item uh that was namely uh finded roughly $217 million and put it in the reserves two two steps so she over her objection I'll say out of duress acest to the chief financial officer's demand and zeroed out the pay Equity program in order that that money could be put in the reserves but um that was as I said two transactions in the budget to zero out pay equity and to add to the fiscal stabilization I don't think that's why the budget got delayed why do you think it got delayed as I said a minute ago I can't speak for the mayor okay I figured I would try just in case yes I don't think there was a good reason um now interestingly the mayor when she did zero out uh the Early Childhood um fund she said in her statement it's not so much because the amount of money is uh untenable this year but she said mapping It Forward uh it becomes very difficult to cover that amount in future budget Cycles do you buy into that do you see that as a legitimate concern or was that just just uh just words um I'm going to say yes or no do I buy into it the um the pity fund which is to subsidize Early Child Care Centers recognizing that actually that is pre prek education and so we want the Educators childcare workers to have a level of training which then in turn demands that they have higher pay so that's where the subsidy comes in it's basically to better pay the the Educators in our early child child care centers um the The Advocates have argued that there needs to be more money in it than in the previous year and more money in subsequent years and uh that's an unsustainable path of growth on the other hand well and what the mayor had proposed so actually I think there's three points here the first is that The Advocates were advocating for a unsustainable growth pattern the second is that the mayor had wanted to reduce it reduce the funding the third is that the the third point is that in order to meet the CFO demand the mayor zeroed it out entirely does that answer your question yes but you don't think that there's an unsustainable growth pattern well what we were able to do was to um not only restore to the level at which the mayor had proposed cutting it but to actually restore to the level that it was this past year which was 79 million that is $70 million in recurring cost now it seems odd when so many Studies have proven that the number of words a child knows age is so determinant of their eventual uh academic growth and occupational potential that when the mayor was following her explanation put in this corner by having to fund the uh the reserve funds unexpectedly all at once that the obvious source of money for her was to go to the Early Child educator fund is it was it just a happen stance that the amount she needed and the amount in that fund were quite similar and that's why it was a go-to because it just seems politically a deeply unwise place to go to look for savings uh this is there's not a simple answer here the um the mayor had proposed cutting it from roughly $70 million in recurring expense to $50 million I'm not I'm not going to defend that as reasonable and in fact the what I was able to do was to find money and present to the council a revised budget that funded it on a recurring basis at $70 million um the the cfo's demand for replenishing the reserves was a demand as I understand it that was made in March just a few weeks before the budget was due um given that the budget was largely developed as I understand it by the executive at that point um they it was easier for them to find one place which was in Pay Equity with the $50 million over four years it was $217 million to the financial plan um it was easier to do that than to go into each ageny and trim here and trim there um the CFO probably would protest and say it wasn't last minute but my recollection is that um there was a meeting that I was part of maybe I called it between the city administrator and the Chief Financial Officer to discuss his demand which I thought was exceeded his legal Authority and the mayor thought exceeded his legal Authority and uh then the CFO said he would consider our arguments and get back to us and as I recall it was maybe two weeks before the budget was due maybe even less that the CFO got back and said that uh it was within his authority and that um he was going to continue to insist that the money be replenished so it was fairly last minute that this the executive was faced to the situation of defy the CFO and the CFO would not certify to the council that the mayor's proposal was balanced or acques to the CFO the mayor chose to acques under protest and the to acques meant finding coming up with 27 $1 million uh I already explained that the easiest way to do that was to go to One Source rather than to look at multiple agencies and do you think the mayor knew uh or hoped that the council would find a way to save the fund or do you think it was just a um something I think I think you're you're trying to analyze this too much if I may push back but the mayor knew because the CFO knew that I had no intention of complying with the cfo's demand and you I think ended up finding a Savvy way out of the demand you you asked yourself what did the CFO truly want what were the cfo's concerns about uh keeping the various um funds funded and you I think threaded the needle um rather than just axing a giant policy program why do you think the mayor did not try to um a similar approach was there not time in the two weeks and you had a bit more time to figure out ways that you could satisfy the CFO without gutting programs um well there's no question but that I had more time the cfo's response to the City administrator as I said was about two weeks before the budget was due when we got the budget we had 56 days before the first vote so we had more time um I made it clear that I was not going to acques to the CFO because the law is quite clear how our Reserve funds are funded and it's not by a direct appropriation it's through end ofe Surplus and there's every reason to believe that over the next three or four years that we will have surpluses because we we we will get the control board back if we don't have a surplus at the year end uh so I'm confident that by that manner alone the reserves will be fully funded um it is true that I um found some additional how do I but I did I land on an additional strategy but but um I think what needs to be said here is that the CFO insisted that the reserve fund be replenished and he argued that the budget was not balanced on unless it was replenished well that's just absurd the budget is balanced on whether expenditures are below all available resources has nothing to do with the reserves uh I was able to figure out the CFO was not immediately clear on this point that this was a liquidity issue for him in 2028 that's four years from now a liquidity is different than a balanced budget and uh so I looked at what we could do to improve the liquidity situation four years from now and since that was addressing what the cfo's true issue was it made him happy and you because you had a multi-art strategy that you'd come up with I feel like it was three or four different elements to reassure the CFO on cash flow um cash flow liquidity yes there are three or four um steps the um is having access to other to cash and other funds like the housing reduction trust fund that sits in an account if it's being used then he would not have access but if it's not being used then he should be able to have access uh and then promising that if the fund is not um replenished in with surpluses over the next couple of years that then in a couple years we would look at appropriating there were several strategies but the bottom line is that the CFO exceeded his authority that the issue was not whether the Bal budget was balanced but rather liquidity issue and I did address the liquidity is and I mean the challenge is the district's finances is the district gets several enormous chunks of money some of them twice a year um so it's not that there isn't the money to pay the bills it's just that when the bills come due if you haven't gotten your giant six-month infusion of money in that moment you might be tighter on cash so when we talk about liquidity that's it'd be kind of like if we got paid once every six months but we had to keep paying our mortgage every month you would run out of money at times month to month but across the year you'd have plenty of money to pay your bills correct so we have what's called a financial trough or a cash flow trough in February right before real property tax bills are paid and income tax is paid and then we have a cash trough in August which is right before real property tax bills were paid now the package you put together we've been talking about you said a minute or two ago the CFO now is Happ so is the CFO 100% happy is signing off on everything we can sail into the sunset uh the dispute has been quelled uh he sent me a letter today saying that the budget that we adopted uh he certifies as being balanced now interestingly the home rule act doesn't require him to certify that the budget that we pass is balanced but he he sent that letter today but it helps well it's his determination that we that the budget is balanced that was your question whether he's happy right um now the last time we talked it was a very long time ago so you might not recall um but the I was putting forth the theory that why is it that the mayor and the CFO always seem to be on the same page throughout multiple Mayors and CFOs um and the council always seems to be the odd man out um it occurred to me since then first of all the council and the AG tend always agree um and tend to be often at uh odds with the mayor and the CFO this year is the exception that proves the rule where the AG the council and the mayor were on one side and the CFO uh stood alone um but to talk again you talked about it the last interview why it does happen that the mayor and the CFO frequently are on the same page and the council and the AG are frequently on the same page or dispute the FRS um well I can think of plenty of instances where I've disagreed with the attorney general for instance his opinion a year ago that an initiative is a prop is proper for the voters to consider notwithstanding that it's not balanced that it affects the budget that's the the phrase is it affects the budget uh because if it's uh subject to Appropriations and it's not actually affecting the budget that's a change in a interpretation uh after 40 years of practice I completely disagree with him I what it means is that almost any measure any matter is is um acceptable for a initiative even if it would have an impact on the budget because technically the voters can't appropriate only the council I mean that's just nonsense so no I don't always agree with the uh the Attorney General um at the moment I'm blanking but there have been a couple other issues where I've disagreed with him the um I know in the past that the CFO was I think because essentially the CFOs function is an executive branch type function that the CFO tended to work cooperatively with the mayor at times when it didn't seem appropriate for example uh one of the reserves funds is the contingency reserve the contingency reserve is available for expenditures that are unforeseen one time and extraordinary that's three criteria unforeseen one time and extraordinary and yet for example uh migrants services that is the program that deals with the immigrants to this country who the governors of Texas and Florida have decided to put on buses and send to the district which is pretty outrageous um because that's not the way to treat people and in fact I know early on and I suspect even today that many of the immigrants had no idea what was happening to them they were just put on these buses well the first month or two that was was unforeseen and it was extraordinary but after a year it's no longer unforeseen extraordinary or one time in expense and yet the uh CFO was authorizing the mayor to draw from the contingency reserve rather than coming to the council for an appropriation um and that's very problematic because only the council under the home rle act gets to appropriate and when the mayor draws from contingency it means that then there's uh less Surplus at the end of the year uh and if she's not able to replenish the draw then the council has to is required to appropriate it so it's like forcing an appropriation it's just wrong wrong wrong and the CFO has been very [Music] um um say a um a partner in crime on this but uh I think the CFO is recognizing that this is a mistake and has tightened up uh and is approving these contingency draws left less frequently um and then uh you know this disagreement this year over the fiscal stabilization Reserve so I I think things have changed in terms of that it means your premise is no longer quite so valid but the reason why it seemed valid a couple years ago was because as I said the cfo's function is really more in line with the executive branch than the council and it also struck me that the the mayor and the CFO um have extraordinary uh Power um you know the mayor admittedly it's all funded by the council but mayor has you know whatever thousands of employees and billions of dollars um the CFO has extreme power as granted by Congress the council in the ag ag because it's a newer role you know an elected AG is a newer role and the council I feel like are kind of more Strivers like are more kind of scrapping and trying to um to to to I don't want to say like get a little Elbow Room but kind of feel out uh the authority we have um whereas CFO and the mayor are kind of good they're they're kind of good they have plenty of authority plenty of money plenty of staff whereas I feel like we're kind of we in the AG are kind of Scrappy so that's what would kind of explain to me why sometimes we end up in a similar Place yeah I don't know if I agree with that yes the attorney is a relatively new position in our home rule government uh it's also true that the Attorney General is an independent position right it's uh the Attorney General is elected not appointed by the mayor not confirmed by the council uh I think it's the Independence that makes it um easier and quicker for the Attorney General to disagree with the mayor or the counsel that makes sense that makes sense um there was so much talk about this was going to be a tight budget year a budget year the likes of which we hadn't seen in many many years I'm not doubting that there were some hard decisions made but it did not come across at the end as hard as it felt going in would you agree with that or do you think this was unusually difficult compared to many years before um so our process is one where the budget is similar to any other legislation it gets referred to a committee and the chair of the committee puts together what's called a committee print in the case of the budget referred to the committee of the whole which I chair so I'm the committee chair who puts together a committee print or a budget um I would say that I listen to constituency groups better than the mayor did and I listen to council members better than the mayor did and I was able to put together with basically the same dollars that the mayor had a budget that was Balan that um was more pleasing to more people the mayor could have done what I did and she didn't so she cut a whole bunch of programs and I was able to working with other council members move money around so the programs either didn't need to be cut or not cut as much and do you feel like you did you sort of buy us time is next year just going to be an even harder budget year um did we like kick down the road or do you think you could again uh uh perform the feat you did uh with the same amount of money keeping people basically getting to a consensus budget um well the last year was was a difficult budget um and I was able to put together something that was uh far more palatable to people just as an example the mayor cut ER from roughly $40 million to $20 million she cut access to Justice which provides civil services to Indigent residents cut it from 31 million to I think it was 18 million she Comm cut millions of dollars out of uh domestic violence ser and victim Services programs she uh cut uh roughly 80 schools we're going to have to lay off teachers uh with regard to schools I just shifted money from Central Administration to school individual schools and restored roughly $25 million to individual schools and then we were able to find money for access to Justice and the um um access to Justice and uh some additional money for ER uh she had zero funding for vouchers I was able to find money for vouchers uh it was just I hate to put it this way but being smarter about the budget recognizing that you can't the the government can't be cutting all these uh safety net programs the way she was and um that we can we can um uh uh how do I just reorganize the way we're spending money better so we don't have to do those cuts that's what I did um yeah and I thought I I had to uh smile because I feel like in this budget ccle um yourself uh council member Robert White in particular were talking about we need to look at spending we need to spend smarter and figure out where there's duplicate spending and and unwise spending um and that's been a call that that has been repeatedly trumpeted this whole budget cycle and then I um saw the mayor had put out a statement just a day or two ago saying that we can't the the money train is ending and that she was going to start taking a closer look at spending and that she invited the council to join her and I well unfortunately she may be borrowing that rhetoric but I'm I have no expectation that there will be real follow through when I sat down with her people in January before we got the budget I was told that this year was going to be the year to get everything uh set everything straight and to look for efficiencies and spend money more wisely and I have to say I didn't see that in the budget that was given to us um it's very disturbing to me the um uh for instance the um we we went through the capital budget to look at what projects really were likely to get done in in the next couple years and if they weren't then we either reduced them or cut them from the capital Improvement plan and the capital budget and the result was we freed up tens of millions of dollars in debt service it makes I don't understand why the um the mayor would want to have to budget Debt Service for capital projects that aren't going to get built in the next year or two but that was part of the budget that she gave us uh I don't know why she thinks it's okay to cut individual schools and keep uh Central administration at DCPS fat and happy it just doesn't make sense to me and uh and the CFO because didn't the CFO when you proposed the cuts to central office didn't the CFO certify the cuts and basically say yeah they should be able to do the work with the Lesser funding the council's budget office will not let council members or committees cut programs that the CFO the office of Revenue analysis doesn't certify as being cutable so I mean we can eliminate a program if we want to and I think I did that in a couple of instances but uh just to use an example that comes quickly to mind uh if I want to uh cut to Medicaid spending uh when we have folks who are enrolled in Medicaid um and that's an entitlement the CFO or the office of Revenue analysis is going to say I can't do it and so then we don't do it but uh but uh the budget that I presented every detail had been presented to the office of Revenue analysis for them to tell us whether in fact we could take those cuts and they did that's why I was able to do it um I think we're just about out of time on our main topic here um but I do want to um pivot to the fun round we always have to leave time for the fun round um this is what I'm trying to do um I'm trying to if you were to build a perfect council member and you had to build the build the council member with the best traits of your colleagues past and present pick a couple examples of what what traits you would take from what council members to merge into one perfect council member moving forward is there one Council member's Charisma one Council member's uh uh anal analytical ability and other council members presence in the community um going back through the history of the council and your present colleagues what would you uh take from each to to make a perfect uh council member so am I allowed to clone myself yes yes a popular answer what was the name of the uh the sheep that got cloned Dorothy oh uh Dolly ddy who dolly dolly yeah dolly yeah yeah yeah um pretend you can't clone yourself um and you're forced to dig into uh all the traits of all your colleagues past Josh Gibson I'm not gonna go there but I will say this I think that experience is important uh week ago I met with legislative leaders from other states council is a member of the National Conference of state legislatures and it is just appalling to me the states where they have term limits because they have turnover so for example uh in in the group was the majority leader for the Nevada House House of Representatives for the state of Nevada he's elected to a two-year term he's term Limited at I think two or three terms I think it's maybe three terms uh maybe four um they only meet every other year I mean he he's not able to serve long enough to get any experience then you have to rely on staff or this is what a number of them said to me you rely on the lobbyists because you don't have that history that experience of so many issues repeat themselves and uh I know with this budget we had some issues with the library funding and these are issues that we also had a couple years ago that we had a few years before that so having been on the council we have experience we've seen the issue before we put it in perspective and uh respond accordingly with term limits you lose that and I know that there are folks who think term limits are great and that's because term limits Force chain um there is some value chain but there's a lot that's lost when somebody who has the experience who's been there who's seen it and done it uh is around um so uh I would say that's a very important a very important characteristic for any legislature many many uh decades ago I was a a high school intern for Senator Barbara Makowski and she had a quote that I thought was good was that um everyone hates a career politicians but everyone wants a career dentist which I think makes a ton of sense you learn things by doing things and you know the longer you do them the more you know um and so you know if you're so uh hot to trot for brand new legislators constantly why don't you go to a dentist who's in their first you know three months of practice correct and that's what I saw in talking with these legislative leaders from other states is those states that have term limits uh they're really struggling with expertise and uh getting their footing um I've been chairman of the council for about 10 years and uh I feel like I'm just getting into a Groove in terms of understanding the budget and how to move it through and where to look for money when the mayor is cutting programs and that I mean uh folks May disagree but I think that uh we came up with a pretty good budget and a minimum amount of paying you know you have a a policy of not giving committee chairmanships to new council members uh with the premise that it takes a couple years just to learn how to be account member cor then in year three you know you add on committee responsibilities and I think that's kind of wise um because it is there are different jobs and they're big jobs uh the learning curve can be kind of steep so like your point is right as the learning curve is peing if term limits chop it off then um that's a challenge correct and I would say that um over and over councilman members after they've gone a couple years without a committee and then get a committee they've said that they thought that that was the better course of action that it does take I mean this is what the members themselves say that it takes a couple years to understand well enough the issues that come before the council you know our legislature is different than any other legislature in the country any other legislature we have City County State and Schoolboard functions no other no other legislature combines all those functions and uh so it's a it it's a challenge and I don't mean by that oh well by will be me I just mean that there's a lot to learn and figure out and uh if it's hard enough in another state just with whatever their functions are it's even harder here because it's multiple uh functions that ordinarily are with other bodies right and we're also a county so we also have County responsibilities City County and State Board of Education City County State and Board of Education function four right and a much smaller legislature so the more kind of on the shoulders of each legislature because there's so few well yes no um if we were a larger legislature then we would be like other states and have a much more formal um structure a speaker who sets the agenda and uh you know decides what moves and party caucuses who decide what the issues are there's um much less freedom for individual members in other legislatures because they're larger right um okay well you dodged the easy question which was to build a good council member out of the positive traits of your colleagues so I'm not even going to ask you this the second part of the question which is to build a terrible Frankenstein council member out of the worst traits of your past and current uh uh colleagues unless you have any particular thoughts uh well the worst legislator would be one who's mean to their constituents and mean to their colleagues um and doesn't misses a lot of meetings I was going to say doesn't come in to work and uh is uh lazy and corrupt that would be the worst that's the Frankenstein but you're not going to assign this St any colleagues correct but I I except to this who was the congressman whose name I forgotten George Santos from New York yeah yeah he comes pretty close yeah that that is true um okay well we are well beyond uh out of of time so uh we will have to cut this short but um I hope to see you uh prior to 16 months from now uh back for another interview I will send you frequent invitations um listeners uh remember to subscribe to our podcast on Soundcloud uh or wherever you get your podcast just search under hearing the counsel thanks again for joining us uh listeners chairman Mendelson tune in next time we're on DC radio at 96.3 on your FM hd4 dial or at dc.gov I'm Josh Gibson this is not a council hearing this is hearing the council honestly thank you very much chairman I appreciate you taking the time I know it's a busy season sure thank you Josh okay take care bye bye