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Budget


What will DC look like under Trump? One of our contributors takes his best guess.

Before last week's historic and unprecedented election, DC was preparing for a more autonomous and possible independent future. With Donald Trump as president, it may be in for just the opposite.


Photo by www.GlynLowe.com on Flickr.

With several significant moves in the past few years backed by—or at least supported by—President Obama and other prominent democrats, the District was able to recommend its own federal district court judges, legalize cannabis, defy the NRA, maintain greater control over budget issues, and even pass a statehood measure by ballot.

This growing independence will likely be curbed by the incoming administration and Republicans, who are more powerful than ever given that they retained control of the Senate and the House. The GOP, which has been outspoken on the District's growing autonomy, is likely to retake control of the District.

Greater Greater Washington contributor Stephen Hudson recently raised a few points on key issues ranging from infrastructure to immigration to criminal justice reforms that could be impacted under the new administration:

Trump has emphasized law and order. This sounds eerily like Nixon's 1968 platform, and he has evoked images of inner cities having out-of-control crime. Even more unsettling, Rudy Giuliani's possible involvement in the future administration is very concerning, since he really embodied the "zero tolerance on crime" attitude of the 90s and embraced the criminalization of homelessness. I see some negative consequences for DC, where we have defied the feds on marijuana and needle sharing and 10% of the population is ex-cons, and we have a higher violent crime rate.

The GOP loves meddling in District affairs, and it never seems to work out for our benefit.

Trump's demand for a $1 trillion infrastructure package could be positive for us. God knows we need the money, but again, the devil is in the details (of which there are few):

  • Trump talks a lot about public-private partnerships, which is fine, but it's unlikely that he can levy that much money in private funds.

  • Failing private funds, where will the money come from? Trump wants a budget-neutral infrastructure package (in theory), so that would involve raising more government revenue, or cutting some other program. The House GOP has regularly opposed increasing the gas tax, Passenger Facility Charge, etc., so I think he's going to have an uphill battle convincing them.

  • If the GOP ends up going Trump's way, we could actually get something favorable out of this deal. He has talked about trains and horrible airport infrastructure. On the other hand, if he surrounds himself with traditional party advisors, I'm less optimistic about federal spending in our region and infrastructure.

Trump is not exactly a budget-hawk. This could theoretically be good for government hiring over the medium term, but the hiring freeze and likely gutting of some agencies also gives us mixed information on his intentions.

The Trump/Ryan tax plan would not be good at all for our region's poorest residents.

If we do see decreased immigration, this could be catastrophic for our and other regions, and Trump's xenophobic rhetoric threatens our multiculturalism. Even though I would like to think our region is relatively tolerant, we are not immune to hate. I even expect some unforeseen consequences to the local economy, such as fewer tourists visiting the US, which was a problem during the Bush years.

In short, if DC had warm feelings towards Mr. Trump, he would have received more than 4% of the vote.

What do you think the future might hold for DC?

Transit


Under Donald Trump, federal funding for transit projects is likely to dwindle

We're almost a week into the transition to a new presidential administration, and there's still a lot we don't know—for example, President-elect Trump has not selected a transportation secretary. But if you look at statements he made during and after his campaign, there's reason to think the coming years may bring more money for roads in our region and less for public transit.


We could be in for much more of what's on the left and a lot less of what's on the right. Images by and Mega Anorak on Flickr, respectively.

One program likely to be be affected is the one giving federal Transportation Investment Generating Economic Recovery (TIGER) grants. Created in 2009 to invest in regional transit projects around the country, TIGER grants have helped fund a number of projects in our region.

For example, $58 million in TIGER money went toward bus improvements in the region in 2010, including $8.5 million for the Metroway BRT in Alexandria and Arlington; $20 million went toward HOT lanes in Virginia in 2011; $10 million helped extend the Anacostia Riverwalk in 2012. The most recent beneficiary was Montgomery County, which received $10 million to build BRT from Silver Spring to Burtonsville.

This is what TIGER grants have gone to around the country in that same timeframe:


Image from the USDOT.

Under Trump, transportation is likely to mean "cars"

The TIGER program has been under fire ever since it was created. In 2013, House Republicans put forth a budget bill that would have eliminated TIGER completely (as well as cut 21% of Amtrak's funding); In 2014, Senator Jim Inhofe, a Republican from Oklahoma, tried to steer TIGER toward only funding roads and freight rail; in 2015, Republicans proposed extreme funding cuts to TIGER that would have made the program nearly useless.

Trump's administration, with the support of a Republican-controlled House and Senate, could finally drive a nail in the coffin. Here are a few quotes from Trump's stated infrastructure plan, along with thoughts on what they might actually mean:

  • "Leverage new revenues and work with financing authorities, public-private partnerships, and other prudent funding opportunities."

    On the face of it, this isn't bad. Public-private partnerships are regular government practice. But with Trump's business focus, this could give more leverage to private companies over government, especially if implementing his plan would require hiring more government workers, which could prove to be unpopular with members of Congress.

  • "Harness market forces to help attract new private infrastructure investments through a deficit-neutral system of infrastructure tax credits."

    Deficit-neutral is a popular phrase with Republicans and Democrats. In this case, Trump intends to make up the cost of infrastructure with tax revenue from the companies that build the infrastructure and the workers who would be employed to do the work. But this assumes that he's creating jobs rather than just giving the work to construction workers who have already been paying taxes, and it also assumes that people will use the roads to the level necessary to raise enough revenue to offset the cost.

  • "Implement a bold, visionary plan for a cost-effective system of roads, bridges, tunnels, airports, railroads, ports and waterways, and pipelines in the proud tradition of President Dwight D. Eisenhower, who championed the interstate highway system."

    More airports could definitely be a positive, and bridges do need to be repaired. But the "tradition of Eisenhower" is the highway system and single occupancy vehicles and not public transit, which would be able to move people around for cheaper and reduce gas consumption.

What's all this mean for our region?

An administration that prefers road infrastructure projects over rail and bus projects could pose big challenges for the region for several reasons.

If the administration gave private companies more power to build and maintain roads and bridges, it would create even more roadways with costly, controlled access—HOT lanes, HOV fees, toll roads, you name it. Expensive projects like these would most likely go up in areas where most people can afford to pay more for access. But for those who can't, and who still need to travel in these places, there could be real problems.

Also, if Republicans also take TIGER funds away from transit projects, local jurisdictions may find it harder to improve public transportation for residents to compensate for the new, more expensive roads.

Finally, any projects to conserve lands for walking or jogging will very likely be off the table, and it would be harder to build new bikeshare stations or bike lanes.

Budget


Metro's latest budget proposal includes huge cuts to rail and bus service

On Sunday, WMATA released a preview of its budget proposal for next year. The "Reality Check Budget Plan," as general manager Paul Wiedefeld is calling it, includes less frequent service, higher fares, and employee lay-offs.


Photo by Metro Max on Flickr.

Wiedefeld's hope is that these moves will free up $50 million, which would go a long way toward closing WMATA's $275 $290 million budget gap. The plan also reflects Metro's estimate that next year, ridership will be 20 percent below peak ridership levels in 2009.

On October 13, Metro presented an early glimpse at changes coming to the transit system. While some of the proposed changes that sparked public outcry, like closing stations during off-peak times, are not included, a lot of what WMATA staff is proposing is sure to turn heads.

There will be longer waits on Metrorail, and some bus service will cease

Under the new proposal, each line would run every 8 minutes during peak times (on weekdays from 5:00 am to 9:30 and from 3 pm to 7). At stations in the city center that are served by multiple lines (Blue-Orange-Silver, for example), trains would come every 2-4 minutes. On the Red Line, trains would run every 4 minutes between Silver Spring and Grosvenor.

This reduction in service takes each line's frequency from the current 6 minute spacing to 8 minutes at peak. During off-peak times, the wait for each train would stretch to 15 minutes on every line.

Blue Line riders, however, would get a boost in service, as more trains would be added to help with congestion. Instead of running every 12 minutes, they'll come every 8. But Rush+ service, which sends some extra trains from Franconia up the Yellow Line, providing more trains to Columbia Heights and other Green/Yellow stations, would be cut. Neither of these changes were in the October 13 proposal.

Metro also proposes eliminating the 14 bus lines with the lowest ridership. Here's a list:

Notably, it looks like the idea of cutting Metroway BRT is off the table, at least for now.

The new proposal increases the minimum rail fare to $2 during off-peak times and $2.25 during peak times. The new maximum fare would go up a dime, to $6. Metrobus fares would increase by a quarter, to $2 per trip for one-way rides. Express fares would go up by a quarter, to $4.25. Parking will increase by a dime.

Metro will also lay off employees and cut health benefits

In the October 13 proposal, Metro said that it was already laying off 500 employees during FY 2017, which would net $25 million in savings for FY 2018. The new proposal moves that number to 1,000 employees (the 500 previously-mentioned ones plus 500 new ones).

The earlier proposal also suggested that some health benefits would change, such as higher premiums and adding deductibles, and that these were already underway in FY 2017 and will be complete in FY 2018. Though the new proposal does not have details about whether these specific changes are the ones being considered, it seems likely that they are.

What's next?

Metro staff members meet with the board's Finance Committee on Thursday, November 3. The Board of Directors will then meet in December discuss the proposal, and public meetings will begin in January 2017. A vote to actually pass the plan would be in March.

The proposal is already facing opposition.

In addition to answering questions about the cuts proposed here, Metro should also answer questions about the status of the proposal to cut late night service. While it isn't directly related to this budget proposal, it does affect revenue because Metro should provide late night service in some capacity, whether it is through rail or bus.

If Metro opts to cut rail service during off-peak times but does not end late night service, riders are still looking at longer wait times. If Metro opts to end late night rail service but provides extended bus service, how does that affect any lines that might be getting the axe for lower ridership? Can those lines be altered and used elsewhere? Do they still get the axe?

Update: This post originally said WMATA's budget gap was $275 million. It's actually $290 million.

Housing


DC's affordable housing fund isn't doing enough for low-income residents, an audit says

The District's Housing Production Trust Fund is a program run by the city to fund and build affordable housing, which helps some of DC's poorest families live in one of the country's most expensive housing markets. A recent audit, however, says that too little money is going to the lowest-income residents.


Photo by Kamesg on Flickr.

Every year, the District Department of Housing and Community Development puts all of the trust fund's money into a big pot, along with other federal and local funds earmarked for affordable housing. Then it puts out requests for proposals (RFP) to build housing using the money that detail exactly how it must be spent. Non-profit and for-profit groups alike apply for and get money from the fund.

According to DCHD, almost a billion dollars has gone into the fund since 2001, leading to the construction or renovation of almost 10,000 units dedicated to housing families whose incomes can be far below average.

The city's Office of the District of Columbia Auditor recently took a look at how HPTF money has been used since it was created, and how DCHD has accounted for that spending. The report says that while a lot of money has been spent to build or renovate housing units, far less money than what is required has gone toward housing for people who can afford the least.

Far more money was supposed to go toward housing for people who earn the least

By law, at least 80% of the fund has to be spent on helping finance construction for housing that's for households earning less than half of the Area Median Income (AMI). AMI is a tool used nationwide to decide how much a family needs to make to meet requirements for subsidized housing in a given area. The AMI for a family of four in Washington in 2016 is $108,200 a year.

Within that 80% requirement, half of money spent has to go towards housing for households making less than 30% AMI (i.e. a family in Washington that only makes 30% of $108,200 in a year, or around $32,000 for a family of four) while the other half focuses on households between 31 and 50% AMI.

But in 2014 and 2015, the fund simply hasn't spent all that much on that subcategory of housing. In 2014, only 32% of the fund actually went to housing households earning 50% AMI. 2015 was a bit better at 49%, but still far below the 80% requirement.


Table from the DC Auditor.

DHCD is working to fix the problem

According the audit, DCHD has a lot of work to do to catch up and meet its goals. The report recommends that DCHD and the advisory board make up for lost time by focusing only on housing families that earn less than 50% AMI for the foreseeable future.

"DHCD should consider compensating for the loss of investment in units for households earning 0-50 percent AMI during FY 2014 and FY 2015 by focusing all available funds on those two income categories for the near future," write the auditors.

In a section of the reports for comments from DCHD, the agency says that it has already started on a plan to get things back on track, and to ensure that the right amount of money goes toward those groups: "Beginning in fiscal year 2015, [DHCD] began issuing targeted requests for proposals utilizing the Housing Production Trust Fund with a requirement that the agency will only fund new construction projects targeting households with incomes of 50% of area median income and below."

To make sure the lowest-income families keep getting the funding they need, DCHD and the Production Fund will have to keep better track of their spending and reporting to the city's oversight agencies. The audit also revealed that several key reports that are due quarterly are simply missing, and that a lot of the fund's activities were classified under a general "other" category. That makes it hard for city auditors to suss out what money goes where.

The Housing Production Trust Fund is an important tool for the city to keep some of its housing affordable for individuals and families struggling with high housing costs in Washington. And after nearly being cut away to nothing in 2012, the fund saw a big infusion of nearly $100 million dollars during last year's budget process.

But all the money in the world doesn't matter if it doesn't get to the people who are supposed to be the beneficiaries. So now its up to the city's workers and elected officials to work together to fulfill the Housing Production Trust Fund's promise.

Meta


Here's Greater Greater Washington's budget for 2016

Our goals for 2016 include targets for raising more money, including from our upcoming reader drive, foundations, and corporate sponsors. When we posted the goals recently, some of you asked to hear more about our budget and why it's getting bigger.


Budget image from Shutterstock.

Last spring, Greater Greater Washington was in a very different place financially. We had just formally set ourselves up as a nonprofit organization,* and through the reader drive and gifts from our board, editors, we were pulling in enough to pay for a half-time editor (Jonathan Neeley).

However, editing the blog is much more than a half time job, and a part-time job is not a recipe to keep someone for the long haul. Our all-volunteer editorial board and board of directors were amazing, but most are far more interested in urban policy than running fundraisers. What to do?

What it takes to be sustainable

We could pull off an annual reader drive, but that alone would not make a sustainable organization. We especially needed someone to run the organization—to do all the financial tracking and tax filings and office policy writing and fundraising that it takes. Plus, there was a lot more we wanted to do—write more about topics besides transit, especially housing; about Maryland and Virginia and east of the Anacostia; about politics, education, and more.

Fortunately, the Open Philanthropy Project wanted to fund organizations that care about how not enough housing for everyone pushes housing costs up and up. A combination of a direct gift from Cari Tuna and a grant to our fiscal sponsor* funded us to grow to three people: Jonathan full-time, a Managing Director (Sarah Guidi), and a Housing Program Manager, who we're working on hiring.

Big opportunity, big challenge

This is a big opportunity and we're really excited about it. It's a chance to make the blog better, and also achieve far more than we can by "just" running a blog. We're doing this to make the city and region better, and want to find ways to actually push the ideas we discuss toward action. This is chance to do that.

It also creates a big challenge. First, we have to do a great job with the housing program Cari Tuna and Open Phil have funded. Second, even though this grant let us grow to three staff, they didn't give us 100% of what we need to operate with three people. They provided two years of funding, but there's no guarantee (far from it) that we'll get another grant from them. So, we need to raise more money to keep Greater Greater Washington going at the current level.

Here's our budget

Greater Greater Washington's budget for 2016 is $253,126. This budget is a projection. It reflects what we think it will cost to run the organization in 2016 at this new level of growth.

Most of the time, organizations look at the previous year's expenses to inform the current year's budget. Since this time last year Greater Greater Washington was still a mostly volunteer organization with no full-time staff or office, we didn't really have a budget. So, we had to build one from scratch. Our actual revenues and expenses may look a bit different at the end of the year, but we will aim to keep our revenues and expenses aligned with this board-approved guideline.

What we have to pay for

Management and the board predict it will cost approximately $253,000 to run the organization in 2016. That includes running the blog, carrying out the housing program, and exploring other projects that can further Greater Greater Washington's mission. Here are the main categories of expenses we anticipate in 2016.

FY 2016 Greater Greater Washington Organizational Budget
Personnel$ 179,493
Computer and web20,210
General operating47,923
Reserve5,500
Total expenses$ 253,126



  • Personnel: salaries, benefits, and payroll taxes for three, full-time employees (Staff Editor, Housing Program Manager, and Managing Director)
  • Computer and web: server and hosting fees, plus costs for website upgrades (we are planning to move the blog to a real modern platform this year).
  • General operating: rent, insurance, legal and accounting costs, professional development, processing fees to receive donations, printing, office supplies, etc.
  • Reserve: It is good practice for a nonprofit to build a reserve that can be used to make up for the unexpected loss of a funding source, to purchase equipment not covered in a grant, or to invest in opportunities that will generate additional revenue.
Where the money will come from

Here are the types and amounts of funding we plan to raise in 2016:

Fiscal Year 2016 Greater Greater Washington Organizational Budget
Individual donors$ 72,500
Foundations176,250
Corporate sponsorships11,000
Earned income2,500
Revenue$ 262,250

We're hoping to have foundation funding plus donations from individuals (the reader drive and some large gifts) make up almost 95% of our revenue. Sponsorships from corporations and income from providing services for a fee (earned income) would make up the other 5%.



Other than the reader drive and the foundation funding from Open Phil, these categories are something of a guess as we don't have specific committed revenue for any of these yet nor do we have past years' experience with them. Therefore, there's a good chance the end totals might shift a lot. That's also why the numbers don't all add up to exactly the same as the expenses. We may, however, need to go far above in one of the categories to make up for coming in far below in another.

We hope this is helpful. Please keep the questions coming. One of our major values, as a community-driven site, is being open with you about some of what's going on behind the scenes. Thanks for being a part of our community!

* We are incorporated as District of Columbia Not-For-Profit Corporation. We have applied to the IRS to be classified federally as a 501(c)(4), which is able to talk more freely about politics (as we do on the blog) than the "typical" 501(c)(3) charitable nonprofit, but also for which donations aren't tax-deductible. A fiscal sponsorship arrangement with Smart Growth America allows foundations to fund some of our 501(c)(3)-eligible activities. Read more here.

Budget


Without changes, the WMATA budget may grow increasingly unsustainable

Metro's costs are growing faster than revenues, and the agency may find itself in increasingly difficult financial shape unless something changes.


Graphs from WMATA.

If current trends continue, WMATA's costs will grow 6% a year while revenues only grow 1% a year, creating a larger and larger need for local governments to pay more, according to a presentation the WMATA Board will discuss Thursday.

While transit is a vital service in our region and one that's worth paying for, it's not realistic for local governments to keep paying a larger and larger share of their own budgets into this one service when cost growth exceeds inflation or the level of growth in local GDP.

WMATA CFO Dennis Anosike and the other staff preparing this presentation seem to have stopped trying to pretend problems don't exist. In fact, there's a whole slide entitled, "KPIs are Clear—Metro Must Improve," referring to the "Key Performance Indicators" the agency uses as management metrics.

About 70% of the forecast growth comes from adding staff or raises for staff; MetroAccess, the regional paratransit service, makes up 10% of the growth, and opening the Silver Line's Phase 2 accounts for 8%. Fuel, contracted services, and other things comprise the rest. There are also unfunded benefits and pension liabilities of $2.5 billion.

According to the presentation, WMATA would either need to get cost growth down to about 2% while keeping revenues the same, or increase revenue growth to about 8% a year, or some combination, in order to keep the local subsidies growing at 3% a year total.

What to do?

Is it possible to keep subsidy growth to 3%, and if so, how? This presentation doesn't answer that specifically, but talks about a mix of "operational efficiency" like reducing the number of staff and outsourcing some functions, saving money on supplies and utilities, other revenues like retail in stations, and changes to service.

The presentation notes that WMATA's labor contract is up for renegotiation soon. There's a constant tension between the need to pay good wages to help families reach and stay in the middle class, pay which also encourages skilled people to stay in their jobs, and the fact that in some years wages and benefits have risen faster than on local governments' payrolls or for private sector jobs.

If WMATA and the union can't reach an agreement, it goes to an arbitrator; in the past, arbitrators have awarded significant raises on the grounds that Metro could raise fares, even if that would hurt riders (and ridership). The most recent contract garnered praise for giving raises but also requiring workers to pay into their pensions.

MetroAccess paratransit rides have started growing again. A few years ago, WMATA instituted some rules (which disability advocates decried as painful cuts) to limit paratransit service more closely to the legally-required level, serving people at the times and in the places when transit service runs. The agency also tried strategies to encourage people with disabilities to use the buses and trains when possible.

A separate presentation for Thursday looks at more strategies to keep people using "fixed-route" service, like more "travel training" which teaches people with disabilities how to get around on the bus or train, more alternatives to the vans such as local taxis, stricter restrictions, and more.

The board will also discuss proposals to move more "non-regional" bus service, bus routes which aren't as much a part of a holistic regional network of important routes, to the local jurisdictions; while that just shifts costs around between governments, it could stabilize the bus costs and services inside WMATA. (More on this later.)

Don't cut service

As the presentation notes, 6% of the region's new households and 14% of the new jobs are near Metro stations, and Metro boosts local tax revenue by $200 million a year. The fact that Metro keeps driving economic growth shouldn't be lost on decision-makers.

Among the presentation's fairly exhaustive list of options is "potential targeted service adjustments to improve productivity." There are indeed ways to optimize service to work better, but it's important to avoid a situation where we gradually erode transit service until we find it far harder for people to live car-free or car-light.

Already, rail service has degraded with slowdowns to fix the tracks, more single-tracking, long weekend headways, and Metro's (now seemingly dormant) proposal to cut service; Metrobus also has seen its share of cuts over time and, worse yet, the buses are just more delayed.

The region can keep transit service at a high level and keep costs growing at a reasonable rate. It needs to be a political priority to do what it takes (once we better know what that is) to make it happen.

Budget


DC's affordable housing programs are slated to get more money than ever before

This year's DC budget includes the most funding ever for affordable housing programs: $222 million. Here's how the money will be spent:


Photo by NCinDC on Flickr.

Nearly half of the funds, $100 million, will go into the Housing Production Trust Fund (HPTF). This will pay to renovate or create 1,000 homes for low income households. Next year's funding is roughly double this year's level and is one of the highest in the trust fund's history.

The HPTF creates affordable housing through grants and loans to nonprofit and mission-driven for-profit housing developers, as well as to renters exercising their Tenant Opportunity to Purchase Act (TOPA) rights. Housing developers and/or TOPA renters are able to use HPTF assistance to leverage additional private financing. As a result, every dollar from the trust fund results in $4-$5 of new housing development.

The HPTF targets very low and extremely low income households, who face by far the greatest need for affordable housing. Rental housing created by the HPTF must be affordable for at least 40 years, and homeownership units (which are purchased rather than rented) have to be affordable for at least 5-15 years, depending on various factors.

Since 2002, the HPTF has produced and preserved over 8,500 affordable units across the city, with 2,300 more units in the pipeline. An estimated 18,000 DC residents currently live in units funded by the Trust Fund.

Rental Assistance

The budget also includes $7 million to expand rental assistance to 500 more households through DC's Local Rent Supplement Program (LRSP). LSRP provides vouchers that cover the difference between the cost of rent and what the household can afford to pay (30 percent of income). This support can mean the difference between homelessness or couch surfing with friends and relatives, and having an adequate home to return to at the end of each (low paid) workday.

The budget also creates a new rental assistance program, called Targeted Assisted Housing, to help 500 formerly homeless families and individuals.

Altogether, DC's locally funded rental assistance will expand by 20 percent next year and serve 1,000 more households.

Permanent Supportive Housing

Another important commitment is to boost funding to end to chronic homelessness. The budget provides $34 million and expands Permanent Supportive Housing (PSH) to 365 more individuals and 110 families. It fully funds the first-year recommendations of a new strategic plan developed this year by the city's Interagency Council on Homelessness.

PSH is for people who need long-term housing assistance with supportive services in order to stay housed. This national best practice offers affordable housing with case management services to chronically homeless individuals and families. Providing housing to chronically homeless residents allows them to focus on other challenges they face, such as mental illness, and has been shown to save money by reducing use of costly emergency services.

PSH does more than provide a home: it offers expert on-site case management services, such as life skills and job training, counseling for drug and alcohol abuse, and special services for people who are elderly, mentally disabled, or HIV positive. Chronically homeless (homeless for a year or for periods over the previous three years) individuals and families with a disabling condition are eligible for PSH, and can apply at any District shelter or homeless service provider.

As of 2009, there were 2,320 units of PSH in DC, providing 2,724 beds for individuals and 1,166 beds for families with children.

This is real money for affordable housing

This budget is somewhat of a landmark for the city, with the Mayor and Council demonstrating in real dollars a commitment to addressing the city's growing housing affordability crisis. A recent post explains how rising demand, rising prices, shrinking supply of low-priced units, and stagnant earnings are making DC roughly half as affordable as it was 10 years ago.

It's a big problem that requires a lot more effort. But Mayor Bowser and the DC Council deserve credit for this major step on one of the city's most serious challenges.

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