published Thursday, May 29th, 2014

Chattanooga Mayor Andy Berke rejects request for budget watchdogs

Two of the city's biggest programs won't have independent oversight assigned to review their performance next year.

Mayor Andy Berke turned down a request by City Auditor Stan Sewell to fund two positions to monitor the mayor's outcomes-based budget and the massive wastewater treatment repairs that must be made as part of a federal consent order.

Berke said his office decided the best way to hold the outcomes-based budget process accountable is to create a new Office of Performance Management with a $150,00o budget that will report to the executive branch.

"We're not doing an audit. What we're doing is performance management," Berke said.

Sewell called both positions he asked for "critical" last week at an audit committee meeting, because hundreds of millions of taxpayer dollars are at stake and the incentive under outcomes-based budgeting is for administrators to cook their numbers.

"If your program is going to be cut and you're the office head over there, you don't want to lose your job and you don't want your employees to lose their job, so the incentive is to fudge those numbers and someone needs to monitor that," said Sewell, who reports to an independent board.

Much of the city's $216 million budget will require departments to meet certain milestones or outcomes, though Berke has yet to publish specific benchmarks for either his first or second outcomes-based budget.

Throughout the year, the mayor's team will measure each department's progress toward administration goals, such as reducing the number of shootings or improving emergency response times. If those goals aren't met, officials will attempt to correct them mid-year, the mayor said.

However, Sewell said allowing department heads to help choose the criteria by which they will be graded could lead to inaccurate pictures of departmental performance.

"Are you really going to pick the very best benchmark if you're going to be held accountable for it? Then you take the question of bringing administration influence over it, and it just looks better if it's an independent auditor."

The mayor's office has said it will hire one person for the new office, but details of how that person will function haven't been decided.

Berke's spokeswoman, Lacie Stone, also pointed out that the city auditor's budget was increased 2.9 percent, or about $16,450.

"Internal Audit can use their budget increase however they choose -- including to monitor sewer funds or whatever is of most importance to the Internal Audit Committee," Stone said in an email.

The mayor's office announced a 10 percent bump in sewer fees, adding about $3.11 to the average resident's water bill each month.

Those fees will help pay an estimated $250 million over 16 years to clean up the city's combined sewer system, which is known for discharging raw sewage into the Tennessee River.

The city already has taken out loans for $55 million worth of projects and will borrow a total of $153 million in the first five years of a federal consent decree. The money will fund about 50 projects.

Sewell has argued that such a big program needs an independent auditor to keep projects on track and on budget.

The City Council also has expressed concerns over the program, which is larger than the city's annual budget. Council members grilled public works officials Tuesday about whether controls are in place to avoid a financial liability similar in scope to the 21st Century Waterfront.

Shoddy work and poor oversight on that project led to dangerous electrical failures and cracks in the concrete that taxpayers are going to have to put up an estimated $12 million to fix, including nearly $3 million already spent.

Public Works Director Lee Norris said the city has two safeguards in place for the sewer program: His department employs its own inspectors, and the firm hired to oversee the project, Jacobs Engineering, has a full-time inspector examining each project.

Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com.

Contact staff writer Joy Lukachick at 423-757-6659 or jlukachick@timesfreepress.com.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

about Joy Lukachick Smith...

Joy Lukachick is the city government reporter for the Chattanooga Times Free Press Since 2009, she's covered breaking news, high-profile trials, stories of lost lives and of regained hope and done investigative work. Raised near the Bayou, Joy’s hometown is along the outskirts of Baton Rouge, La. She has a bachelor’s degree in mass communication from Louisiana State University. While at LSU, Joy was a staff writer for the Daily Reveille. When Joy isn't chasing ...

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