Mayor seeks budget advice

Wed., Aug. 9, 2006

By Mike Prager mikeprager15@gmail.com (509) 459-5454

Consulting proposals

» Among the consultant proposals for a Spokane city turnaround study, the most expensive was submitted by CH2M Hill, of Bellevue, at a cost of $984,000. CH2M Hill has been a frequent city engineering contractor over the years.

» The preferred proposal being recommended to the City Council was from Matrix Consulting Group, of Palo Alto, Calif., at $260,000.

» Other proposals were from U.M. Global, of Plano, Texas, $89,167; EMA Inc., Seattle, $200,000; RNR Consulting, Lancaster, Calif., $234,300; Maximus Inc., Bellevue, $397,400; MC Consulting, Kennet Square, Pa., $128,000; Miller & Miller P.S., Seattle, $132,400; Public Strategies Group, Portland, $274,000; Springsted Inc., St. Paul, Minn., $253,700; Strategic Solutions NW, Beaverton, Ore., $159,500; and Management Partners, San Jose, Calif., $258,500.

Spokane Mayor Dennis Hession and his top staff are asking City Council members to spend $260,000 this year to hire a California management consultant to help turn around the city’s ongoing budget troubles.

Voters last year approved a two-year property tax increase to avoid a repeat of cuts to police, fire, libraries and other city tax services in 2004 and 2005. When the tax expires at the end of 2007, the city is facing a predicted shortfall of $12 million, or about 10 percent of its general tax fund in 2008.

The council is scheduled to vote Monday on the proposed contract to hire Matrix Consulting Group of Palo Alto, Calif. Approval is expected.

The study on improving the city’s organizational efficiency would be led by company President Richard Brady, who has 25 years of experience consulting with local governments.

Chief Financial Officer Gavin Cooley has been pushing for the turnaround study for the past year and said that a recent upturn in sales tax receipts will allow the city to pay for the 16-week study without aggravating city budget problems.

Matrix was selected as the best choice among 12 firms that submitted proposals. Its proposed fee fell in the middle of the group of bidders.

“When I first started this job, I made a commitment that one of my highest priorities was to resolve the long-term financial condition of this organization,” Hession told the City Council on Monday. “It’s really important to all of us to try to find some stability.”

The problems stem from slow growth in city tax receipts versus faster-rising costs for salaries, health care and energy.

Councilman Bob Apple said on Tuesday he supports the study but fears the City Council lacks the resolve to take difficult votes.

“I think it will look great gathering dust on a shelf,” he said.

The city in 2004 and 2005 used a “priorities of government” approach to budget cutting that came from a $150,000 consultant. In 1998, the city hired another consultant for a more limited audit of its operations.

Councilwoman Nancy McLaughlin, during a council briefing session on Monday, pressed Cooley and the mayor on their commitment to making changes. “Where’s our guarantee it’s going to be different this time around?” she asked.

Hession responded by saying, “The hard recommendations that will come out of that will be not an easy thing to sell to the public or to our employees, but we are going to do that.”

City officials also said they plan to coordinate new state performance audits with the consultant’s work so that they don’t overlap. The performance audits are required under voter approval of Initiative 900 last fall.

Brady, the Matrix president who will lead the study, has done broad management studies for 35 local government organizations. He has master’s and doctoral degrees from Oxford University in Great Britain. The company proposal indicates that it plans to interview more than 200 city employees and hear from various groups that depend on city services.