District of Columbia: Briefing Summary of the
Long-Range Capital Financial Plan Report

Background
The Office of the Chief Financial Officer (OCFO) has released the 2024 Long-Range Capital Financial Plan Report. The report looks at current assets, their condition, future capital needs, and funding availability to develop a long-range plan to address all identified capital needs of the District in the shortest possible time.

The District’s asset management system, the Capital Asset Replacement Scheduling System (CARSS), contains a detailed inventory of all District-owned assets, including land, buildings, roads and streets, vehicles, and equipment. This system provides the basis for developing the District’s capital improvement plan as part of the annual budget process and determining the cost of deferred maintenance for current assets.

The District is now generally recognized as having the most complete capital asset management system of any state or local government in the country. This system has been noted by the bond rating agencies as a key factor in the maintenance of the District’s high bond ratings, including an “Aaa” rating from Moody’s.

Key Highlights include:

• $15.03 billion of total capital needs identified; approximately $12.04 billion of those needs are funded in the FY 2025 - 2030 CIP.
• $2.99 billion of unfunded capital needs remain during the 6-year CIP period, down from $3.57 billion last year, of which approximately $1.34 billion is deferred maintenance.
• The decrease in unmet capital needs is attributable to a net increase in the size of the capital budget due to improved revenue estimates compared to previous projections.
• Analysis shows that unmet capital needs can be funded as early as FY 2033, if the District commits 16.5% of its general fund budget to capital projects (12% to support debt service on borrowings and an average of approximately 4.5% on pay-as-you-go cash funding) and no additional capital projects are added before addressing currently identified unmet needs. If additional capital projects are added, the timeline to catch up with unmet needs could be extended significantly.
• The District has a comparatively lower cost of borrowing compared to other cities and states due to strong bond ratings. The District's General Obligation bonds are currently rated: Aaa/AA+/AA+ by Moody's, S&P and Fitch, respectively.
• Challenges to executing this plan include a potential U.S. recession triggered by lagging effects of tight monetary policy indicated by cooling labor market conditions, geopolitical factors, a federal government shutdown with disruptions to the local economy and policy uncertainty related to U.S. national elections. District-specific risks include an increase of remote work, especially amongst the federal workforce, an accelerated decline in federal employment, stalled population recovery, and additional funding requirements from the District to address WMATA's potential budget shortfall.
• The nation's capital remains in an enviable position compared to its peers to navigate these challenges and address its infrastructure needs due to prudent financial management policies (including strong reserves and highly funded pension and OPEB liabilities), a state-of-the-art asset management system, and a resilient local economy.

The report can also be found at www.DCbonds.com.

2024 Long-Range Capital Financial Plan Report - Documents:

• Full Report
• Part I - 2024 Updates
• Part II - History and Background
• Part III - Appendices

Prior Reports