City to track consultant costs—maybe

“Hundreds of thousands of dollars squandered on charrettes, consultants and surveys,” screams a campaign flier sent out last week attacking two incumbent City Council candidates. Money supposedly wasted on such things was a theme in the 2006 council race, as well.

But how much money are we talking about? The answer is that nobody at the city knows. That’s about to change, however.

City Manager Dave Burkland tentatively plans to post online every six months—beginning Jan. 1, 2009—a compilation by name of the millions of dollars paid to consultants, provided his finance staff can find the time to do it.

City staff has long turned aside requests for consulting cost totals. As examples, Councilman Larry Wahl said he asked twice for such figures, only to be told the numbers were not available. Even a request by the previous city manager fared no better. Why?

Jennifer Hennessy, the city finance director, explained that the accounting system software the city uses “does not suggest” tracking such spending, so it isn’t tracked. Digging it out by hand would be labor intensive, she said, and her five-person staff could not spare the time to do it.

In response, the CN&R decided a year ago to undertake its own investigation, but soon learned that isolating the lion’s share of consulting expenses in the city budget just for 2006-07 and 2007-08—one two-year budget cycle—required, for starters, sifting through 350 capital improvement projects (CIPs).

Within the CIPs, money budgeted for consultant work was listed under three categories: preliminary study/design, environmental-impact report, and design. However, once the CIP was underway, the money would be “tweaked” or “moved around” as needed—from consulting to construction, for example, as a senior civil engineer explained.

Thus, it appeared the function of the budget allocation on CIPs was to make sure there was enough money to do the job, not freeze spending in discrete categories. Tracing more than a few representative examples (20) proved too arduous.

There has to be an easier way. The CN&R consulted two computer experts, one a certified public accountant, for perspective on the problem. They said compiling past consulting expenses retroactively would indeed be difficult but tracking such expenses going forward should be easy.

Told of these opinions, Burkland went to Hennessy, who agreed, saying her staff could flag each expense as it came up for payment.

With tracking readily doable, Burkland next recognized its value because presumably it would help build public trust through transparency. At the same time, he wondered just how many people actually would be interested in the results and to what use they would be put.

Burkland, who signs the contract for each city consultant, tentatively decided to divide consultants into two groups: first, those whose work was essential and, second, those whose hiring involved discretionary judgment—that is, whether city staff had the expertise and time to do the job.

Examples of the first group would include the consultant who conducts the yearly city audit, the inspector who periodically checks the condition of the city fire hoses, the lawyers hired to represent the city in lawsuits, or the consultants to do the complex task of designing sewer plant changes for nitrate compliance. After each named consultant and the amount paid, Burkland would add an assessment notation such as “Required, no choice.”

The second group would include consultants budgeted for work in the areas of preliminary study, design, and environmental-impact reports. Examples are the Chico Avenues Neighborhood Plan and the Southwest Chico Neighborhood Plan (combined actual cost: $241,000). The city manager’s assessment might read something like, “City staff has expertise to do the job but it’s not cost effective to divert staff time and effort.”

The same might be true of the general-plan update—many towns do their own updates—which is budgeted at $1.6 million.

It is this second group that would presumably draw public scrutiny, most of it critical.

Fred Davis, Chico city manager from 1958 to 1992, is perhaps the most knowledgeable local voice taking issue with much city consultant use. After noting that millions of dollars are involved, he said:

“One of the costly annual expenditures of the city is the hiring of consultants that rarely, if ever, result in any improvements to the city’s structural-deficit problem.

“So many of these [consultant] studies end up on the shelf. Nobody is going to look at them again, so it’s a waste of money.” He pointed, for example, to the money spent (actual cost: $365,000) on preliminary study and design of the controversial downtown parking structure bordered by Wall and Second streets that presumably will never be built.

“Also, in a substantial number of cases, they are using consultants when it is unnecessary. The city has a well paid staff that could do many of the studies themselves and do as well—if not better—than the consultants who are hired.” That includes the general plan, he said.

As to a kickoff date, Burkland said Jan. l, 2009, appears reasonable. The first compilation would thus be posted online at the city Web site on June 30, 2009. The second compilation would appear on Dec. 31, 2009, and so on every six months. However, he stressed that all this tracking is tentative.

“Once we set up the system, it shouldn’t be difficult to do,” the city manager said. He added that Hennessy and her staff are stretched, he works 78 hours a week, and he didn’t want to be “boxed in.”

Serious observers are quick to point out that staff is indeed kept busy by constant requests from the City Council to do things, find things, or research things.

Asked for his take on the situation, Wahl was pessimistic: “He [Burkland] will do it [track consultant costs] if four members of the City Council tell him to do it.”