Washington, D.C., ended fiscal year 2010 with $7.15 billion in outstanding debt—reaching $9 billion with interest—which threatens to affect development projects and capital investments, according to the Washington Business Journal.

Chief Financial Officer Natwar Gandhi told the district Council in February that the five-year capital plan must be cut by $40 million per year (about 5 percent of the plan) starting in fiscal year 2012 to keep the city under its debt cap. This imposes constraints on the city, which could stunt its growth and cause it to miss investment opportunities.

“The private sector will invest, but without the capital, the deals will not pencil, they will not be attractive to the developers or investors, and it makes it that much more difficult to move forward,” says Merrick Malone, president of the D.C. Building Industry Association.

As of Sept. 30, the district’s debt per capita—the dollar amount owed by every district resident, was among the highest in the U.S. at $11,949. Although the district’s debt has doubled since 2002, it also has resulted in renovated schools, safer roads and bridges, and economic development in long-ignored neighborhoods.

Councilman David Catania (I-At large) chooses to see the bright side, saying the district actually is doing well and its debt is among the lowest in the U.S. when looking at general obligation and unfunded pensions relative to gross “This city has a habit of almost rooting for its failure, which I find a bit nauseating,” Catania says. “It’s time for us to have the proper balance but to look at our strengths and step away from ‘the sky is falling’ at all times, which I do not believe is the case.”