D.C. CFO Natwar Gandhi is raising the alarm that the District is precariously close to surpassing its self-imposed 12 percent debt cap, and urging that any additional borrowing be curbed.
Gandhi’s warning comes at the same time Mayor Fenty is putting the final touches on his proposed spending plan for FY2011. The city is already facing an estimated $500 million budget gap next year.
“I urge the Mayor and Council to carefully evaluate the need for any and all proposed borrowing, including both for the core government functions funded by the Capital Improvement Projects as well as for economic development projects, and to set priorities for what is most critical to the needs of District residents,” Gandhi wrote in a letter to the mayor and council.
There was some good news from the OCFO, however. The city will save $95 million in interest expenses this year thanks to the recent sale of $708 million in bonds.
The full letter from Gandhi is below.
