The Chattanooga City Council approved a $96,000 consulting contract Tuesday to implement a budgeting strategy that officials say will change the culture of how city government spends taxpayer dollars.
The budgeting for outcomes strategy will be a big change for administrators and employees because it will tie expenses to measurable goals and outcomes, said Brent Goldberg, deputy chief operating officer at City Hall.
"It’s a good idea," he said in an afternoon presentation to council members. "It’s the right time to do it."
The strategy would foster a more collaborative approach between department administrators; and it would help align resources, people and dollars to the goals Mayor Andy Berke outlined when he introduced his first budget in July, Goldberg said. The strategy would replace the decadeslong process of incremental budgeting in which administrators adjust funding requests to account for increases or decreases in revenue.
The city’s current $212 million operating budget includes an outcome-based component that serves as a pilot for the new strategy. The Berke administration sought outside assistance to implement the plan across the entire budget for the next fiscal year.
The contract approved by the council is the latest agreement with Public Financial Management Inc., a company founded in Philadelphia that provides consulting services to public and nonprofit entities. PFM has offices across the country, including one in Chattanooga. The company is also working with a task force to reform the city’s fire and police pension fund.
Chris Pencikowski, senior management consultant for PFM in Washington, D.C., will be the project manager for the new budgeting strategy.
Work on the consulting contract first began in September when City Hall requested qualifications from firms interested in the project, Goldberg said. Five Berke administration officials, including two from the Finance Department, reviewed the submissions and gave PFM the highest marks.
The contract received unanimous support from the City Council.
Changing the culture of the city’s budgeting process will involve training administrators and personnel on the new model, Councilman Jerry Mitchell said. He praised the budgeting for outcomes strategy, as well as the pilot implemented earlier this year, but said it will take time to make the shift happen at the departmental level.
"We have to build successes from the bottom up," he said. "Turning the ship takes time."
In addition to changing how to allocate funds, the budgeting process will start sooner than usual. Preliminary work on next year’s operating budget is set to begin in November under the guidance of PFM.
The councilman said Tuesday his remarks were aimed at the way the administration adds late items to the council’s legislative agenda, as well as a misunderstanding of the pilot put in place during the last round of budgeting.
"I said some things last week I wish I hadn’t said," Grohn said. "I was happy to see the presentation. It cleared up a lot of my issues."
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