The Federal and District of Columbia Government Real Property Act of 2006 was intended to provide the District with property for economic development to help expand its tax base and decrease the District’s financial dependence on the federal government. Expanding the District’s tax base should help reduce the District’s structural fiscal imbalance. A structural fiscal imbalance exists when the cost of providing an average level of public services exceeds the amount of revenue a government raises by applying average tax rates. We highlighted this structural imbalance in a 2003 report, finding that the District’s public service costs far exceeded that of the average state fiscal system, and these costs were largely beyond its control, due to factors such as its large low-income population. The report estimated that the imbalance likely exceeded $470 million annually and could have been as high as $1.1 billion, depending on the assumptions used. Our analysis indicated that the cost of delivering an average level of services per capita in the District exceeded that of the average state fiscal system by approximately 75 percent (or $2.3 billion more annually than if it faced average cost circumstances) and was over one third more than the second-highest cost fiscal system, New York. We found that even if the District addressed its underlying management problems, such as inadequate financial management, billing systems, and internal controls, such actions would not be enough to offset the structural imbalance because the imbalance is determined by other factors, as previously mentioned, largely beyond the District’s direct control. We also stated that addressing the imbalance may require changes to federal policies to expand the District’s tax base or to provide additional financial support. If the assumptions underlying this structural imbalance analysis change, then estimates of the amount of the structural imbalance could change in either direction. Development of the properties conveyed or transferred from the federal government to the District through Public Law 109-396 is intended to enable the District to expand its tax base. The federal government and the District must comply with environmental laws when completing the transfers and conveyances. Two environmental laws relevant to the properties involved are the National Environmental Policy Act (NEPA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). NEPA requires federal agencies to assess the likely environmental effects of the projects that they propose. Federal agencies must prepare EISs for proposed major actions significantly affecting the quality of the human environment. Upon completing the EIS, a federal agency prepares a public record of its decision addressing how it incorporated the findings of the EIS, including consideration of alternatives into its decision-making process. The NEPA process is designed to involve the public and gather the best available information so that decision makers can be fully informed when making their choices. The public may participate in the NEPA process by attending NEPA-related hearings or public meetings and by submitting comments directly to the lead agency. The lead agency must take into consideration all comments received from the public and other parties on NEPA documents during the comment period. The entire NEPA process can take several years to complete. CERCLA was enacted in 1980 to clean up highly contaminated hazardous waste sites across the country. CERCLA requires that parties statutorily responsible for cleaning up pollution bear the costs of cleaning up contaminated sites. CERCLA established that past owners or operators of contaminated property, including the U.S. government, may be held responsible for the contamination. No property conveyances between the District, GSA, and NPS had occurred as of June 6, 2008. However, all transfers of administrative jurisdiction, which do not involve the transfer of title, became effective the day (Dec. 15, 2006) that the President signed the Federal and District of Columbia Government Real Property Act of 2006. (See fig. 1 and table 1 for information on all conveyances of title and transfers of administrative jurisdiction.) The legislation directs the following exchanges: Property to the District government: Conveyances of eight NPS properties. Conveyances of two GSA properties. Transfers of administrative jurisdiction of seven NPS properties. Property to the federal government: Conveyances of two District properties to the Secretary of the Interior. Conveyances of five buildings on the West Campus of St. Elizabeths from the District to the Administrator of General Services. Conveyance of up to 12 acres from the District to AOC. Transfers of administrative jurisdiction of nine District-controlled properties to the Secretary of the Interior for administration by the NPS Director (a portion of one property (land over I-395) transfers to the AOC). All conveyances between the District and the Secretary of the Interior, except for Poplar Point, are expected to be completed by the end of summer 2008. For the conveyance of Poplar Point to occur in the fall of 2009 as intended, the District must complete a number of tasks to meet conditions in the law including development of a Secretary-approved land- use plan (see fig. 2.). The date for the completion of conveyances of title between GSA and the District is uncertain and depends on agreement between the District and the AOC on not more than 12 acres of District property for the AOC. The AOC’s current proposed use for the up to 12 acre property is an offsite delivery facility. Although the District and the federal government have taken several steps toward completing the conveyances, several factors have affected their efforts, and additional steps must be taken to complete the conveyances. The District and NPS formed working groups as a first step toward completing the conveyances. However, negotiations about cleanup, testing properties for contamination, and disagreement over land to be conveyed as part of the Boathouse Row properties have slowed the completion of District and NPS conveyances. The District and GSA have completed a property exchange agreement, but the agreement is contingent on the key step of conveying up to 12 acres of District property to the AOC. In addition, the District must complete several steps to complete the conveyance of Poplar Point by the fall of 2009. According to District and NPS officials, the two parties are working cooperatively and formed four working groups to complete the conveyances. A NPS and USPP Facilities Replacement team has been established to discuss various aspects of the pending relocation of existing facilities at Poplar Point. A Planning for Poplar Point team has been established to develop a land- use plan for the site and produce this plan as a document in accordance with NEPA as a way for (1) the District to consider a variety of options for developing Poplar Point and satisfying the District’s Environmental Policy Act and (2) the District and NPS to use in making decisions about NPS and USPP facilities at Poplar Point and their possible relocation. A Environmental Compliance team has been established to ensure compliance with the provisions of CERCLA that govern the transfer of property by federal agencies. A Conveyance Documents team has been established to complete the deeds by which the District and United States will convey properties. The staffs of the District government and NPS also cooperated to complete preparatory work, including drafting conveyance documents, assessing property conditions, completing land-use plans, and identifying potential new facilities for NPS and USPP. In addition, both the District and NPS independently conducted environmental site characterizations for each of the conveyed properties. GSA and District staffs also worked cooperatively to complete preparatory work, including drafting conveyance documents. Several factors have affected efforts to complete the conveyances between the District and NPS. For example, the time frame for conveying Poplar Point was extended when the District and NPS determined in summer 2007 to develop an EIS for this property to (1) avert potential lawsuits and (2) address the concern that decisions made by the Secretary of the Interior about Poplar Point might be considered a major federal action. According to District and NPS officials, they had mutually agreed in early discussions that a full NEPA process involving development of an EIS would not be required before the conveyance; however, once they moved into more details of the transfer and proposed development of Poplar Point, both parties agreed that meeting NEPA requirements by developing an EIS appeared to be the most prudent course. Despite the extended time frame for Poplar Point, the District and NPS originally hoped to have the other conveyances completed by the fall of 2007. However, NPS’s desire to conduct soil sample tests to determine property contamination levels, as well as negotiations over environmental elements of the exchange agreement for Boathouse Row, have lengthened the time needed to complete these conveyances. In October 2007, NPS tested soil and groundwater samples taken from Waterside Mall (Reservations 721, 722, and 723) and Virginia Avenue properties (Reservations 128, 129, 130, and 299) for potential contamination. The analysis of the collected samples did not indicate the presence of contamination as defined by CERCLA. The District and Secretary of the Interior have completed agreements called a Finding of Suitability for Early Transfer (FOSET) and a Site Specific Memorandum of Agreement for Reservations 343D and 343E (the Boathouse Row properties) and Reservation 298. According to senior District and NPS officials, the agreements for Reservations 298 and 343D outline how the Washington Gas remediation plan for Reservations 343D and 298 will be modified to meet the requirements of applicable law and take into account the District’s proposed changes in land use. According to senior District and NPS officials, the District and NPS agreed to identify a new cleanup plan before going jointly to Washington Gas to negotiate its agreement (or compel it) to undertake the necessary cleanup. These officials also stated that Reservation 343E, which is contaminated as a result of the prior operations of a NPS concessioner, is covered in the FOSET agreement.