The 'BBB' rating on District of Columbia's bonds reflects improved financial and administrative factors resulting largely from federal legislation affecting the district and the expectation that strengthened management controls and reforms, economic development initiatives, and other factors will solidify credit fundamentals over the long term. Other rating characteristics include debt pressures and an economy that remains sluggish. A critical component of the district's creditworthiness was the implementation of the National Capital Revitalization and Self-Government Improvement Act of 1997. With this act, effective Oct. 1, 1997, the federal government assumed the majority of the district's unfunded pension liability, which totaled $3.7 billion at the end of fiscal 1997. The costs of certain district operations also were transferred to the federal government,
