Baltimore City Spends $585,000 On Study Of How To Save Money

(Luke Broadwater)  Why did Baltimore need to pay outside consultants half a million dollars for a report that says the city’s financial future is grim?

Some city residents wondered as much after Mayor Stephanie Rawlings-Blake called for a new trash collection fee, a smaller city workforce and cuts to employee benefits as a way to deal with the projected $750 million, 10-year budget shortfall the consultants projected. For a city as financially strapped as Baltimore, couldn’t that work have been done in house?

The answer, according to city budget director Andrew Kleine, is no.

 Though the city’s finance department makes three-year projections, it lacked both the manpower and the skill set to make long-term actuarial projections and propose reforms, Kleine said. Many of the more than 100 proposed reforms will be detailed Wednesday when Rawlings-Blake releases the full report, officials said.

“We just didn’t have the staff or the expertise to do this,” Kleine said. “Our core function is to formulate the budget and monitor the budget.”

As for the cost, Public Financial Management Inc. of Philadelphia won the contract in 2011 with a proposal to charge the city $460,000, beating two other finalists whose work would have cost taxpayers $500,000 and $507,000, respectively.

But the scope of the needed work grew over the past year, Kleine said, and city officials added another $125,000 to the deal — meaning the consultants were paid $585,000 in all.

Even so, Kleine said, it was money well spent.

Public Financial Management assigned 20 employees to the project, with two workers logging more than 750 hours, he said. The company and its subcontractors did in-depth research on the “best practices” of other jurisdictions, conducted interviews, made actuarial predictions and suggested reforms.

On Wednesday, costs associated with the plan grew as the Board of Estimates approved spending $100,000 to hire a city employee to serve as project manager for implementing the plan.


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