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Mendelson rebuts CFO, defends limited draw from reserves to fund budget changes
Summary
Chair Phil Mendelson pushed back on a Chief Financial Officer warning about using reserve funds, saying the Council's approach preserves most reserves and that cash‑flow analysis through 2028 is still pending.
Chair Phil Mendelson read and responded to a letter from the Chief Financial Officer that cautioned against using $150 million of local reserves in the budget. Mendelson said the Council's plan would leave almost 95% of reserves untouched and noted the district still holds over $2 billion in available fund balance, which he said equates to 62 days of operating expenses — above widely‑used benchmarks.
Mendelson criticized the CFO for what he characterized as attempting to shape policy decisions reserved to the Council and mayor, and said the CFO had not produced a requested monthly cash‑flow analysis through 2028 that would quantify the fiscal need. “It’s my belief that the Chief Financial Officer is attempting to impose a policy view,” Mendelson said. He said the Council is willing to adopt measures to smooth cash flow but that the projected liquidity issue in FY2028 should not prevent taking a relatively small amount from reserves now to support FY2027 priorities.
Mendelson also listed possible management options that could improve cash flow, including restructuring capital financing and spreading pension payments over the year, and said further hearings would look at out‑year financial plan changes when the Budget Support Act is considered on July 7.
