To continue funding child care subsidies and food benefits for the needy, D.C. Council Chairman Phil Mendelson wants to pull $150 million from D.C.'s reserve funds.

Why it matters: Tapping the rainy-day fund to float the budget provokes another showdown with D.C.'s independent chief financial officer, who implores city leaders to stop spending its savings funds, lest they invite intervention from Congress.

State of play: Mendelson unveiled a budget yesterday that would restore several major cuts to the D.C. safety net, reductions that Mayor Bowser had proposed to plug a $1.1 billion gap. They include:

• $49 million more toward a child care subsidy program.
• $173 million for housing vouchers.
• $14.5 million for cash assistance to needy families.
• Restored benefits for universal paid leave.
• $300 million to overhaul the Stadium-Armory Metro station before the new Commanders stadium opens in 2030.

To fund it all, Mendelson proposes raising $464 million by decoupling D.C. local taxation from President Trump's new tax cuts.

• And the rest, $150 million, would come from reserves. Mendelson says this would leave reserve funds at a level that would still cover 60 days of operating expenses.

But D.C. chief financial officer Glen Lee argued the drawdown would fly in the face of prudent bookkeeping during lean economic times.

• "Without adequate local reserves," Lee wrote to Mendelson on Friday, "the District risks being unable to meet its basic obligations," like payroll or pension payments. That's because the government sometimes taps reserve funds to cover day-to-day expenses, since tax payments arrive unevenly throughout the year.
• Invoking the 1990s, when Congress took over the city's finances, Lee wrote that such a condition "would trigger the return of the federal control board."

For his part, Mendelson says Lee is exaggerating.

• "If we don't make payroll, commit any of the seven deadly sins, we will go back to the control board," Mendelson told reporters. But with the plan he's proposed, he doesn't see that happening.

What's ahead: Lawmakers will take the first of two final votes today.

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After over 15 years of on-and-off controversies, most famously involving a botched sports gambling app, D.C.'s lottery contractor is severing ties with a local businessman and announcing a new partnership.

Why it matters: The contractor, Bally's Intralot, said it wants a "fresh start" as it pursues renewal of a $10.5 million annual contract.

Zoom in: It's doing so by asking D.C. regulators to drop a small firm called Veterans Services Corporation, founded by Maryland banker-turned-lottery operator Emmanuel Bailey.

• Intralot got acquainted with Bailey in 2009, when D.C. officials all but required the Greece-based company to bring on a small business into what was a lucrative contract. The idea was to spur local jobs.
• But Bailey drew episodic scrutiny over the size of his company (no employees, the Washington Post found in 2019) and his paycheck (at least $1.4 million annually, as Axios found two years ago).
• After a glitchy rollout of D.C.'s sports gambling app, Attorney General Brian Schwalb accused VSC and Intralot of fraud, allegations that both companies denied but paid $6.5 million to settle last year.

State of play: Intralot, which merged with Bally's Corporation last year, still needs D.C. officials to sign off on the change.

• The new partner would be Dynamic Concepts, Inc.
• The D.C.-based company provides utility, IT and infrastructure services, per its website, and was co-founded in 1979 by Pedro Alfonso.

What to watch

❌ The Sand-Man No Cometh: It looks like several big-name celebs who were invited to the White House UFC fight won't be attending, such as Adam Sandler, Dwayne "The Rock" Johnson, Jared Leto and Mario Lopez. (Vanity Fair)

• One guest that might be in attendance: A thunderstorm. (USA Today)

An installation displaying the released Jeffrey Epstein files opens today in Chinatown and will run through Friday. It also has a feature showcasing Epstein and President Trump's relationship. (WTOP)

🥩 Adieu to moo: K Street power steakhouse, the Prime Rib, will close next week after 50 years. Locations remain open in nearby Baltimore and Hanover. (Washington Business Journal)

Summer is peak happy hour season in D.C. — and some of the city's best after-work hangs aren't happening at bars.

Why it matters: Museums, boathouses and other local institutions are taking advantage of long summer evenings with after-hours programming, drinks and snacks.

• Who knew D.C.'s hottest club was the National Cathedral?

Here are five spots worth adding to your summer bucket list.

⛪ National Cathedral: The Gothic landmark's "After Hours in the Towers" is part workout, part happy hour — and absolutely worth it for the golden-hour views.

• After climbing the cathedral's staircases, visitors can unwind with a drink in the Tower Observation Gallery while taking in gorgeous views.
• Tickets ($65 for adults) run from 5-7pm and include one alcoholic or N/A drink. Most dates are already sold out, so book early.

🌸 National Gallery: Strike out on free Jazz in the Garden tickets? The NGA's Sculpture Garden just launched extended summer hours until 8pm, Wednesday through Saturday.

• Garden happy hour runs 5-7pm, with wine, beer and snacks like charcuterie boards and flatbreads available for around $10. Admission is free.

🚣 Key Bridge Boathouse: Georgetown's boathouse just kicked off its weekly Friday happy hour (5-7:30pm), featuring live music, waterfront views and some of the cheapest drinks in town — think $2 Bud Lights and $4 crafts or seltzers.

• Another plus: discounted pricing also includes kayak tours.

More happy hours

PSA for our Capitol Hill gang: The Hill-tern girlies are posting their OOTDs on TikTok.

Why it matters: If you see someone filming their Shein jewelry in the Rayburn bathroom, just know it's the Bama Rush-ification of the Hill.

What we're watching: What turns out to be this year's version of the Tuckernuck Jackie dress.

💭 Mimi's thought bubble: Okay, but when are we going to get Sen. John Fetterman in one of these telling us where he got his hoodie...