Chattanooga Mayor Andy Berke seeks help with budget from PFM Group

Chattanooga Mayor Andy Berke seeks help with budget from PFM Group

October 26th, 2013 by Joy Lukachick Smith in Local Regional News

Chattanooga City Hall

Photo by Jake Daniels /Times Free Press.

Chattanooga Mayor Andy Berke

Chattanooga Mayor Andy Berke

Photo by Staff File Photo /Times Free Press.

Mayor Andy Berke is asking the City Council to spend $100,000 on a consulting firm to implement next year's budget, but some council members wonder why a third party is needed to perform one of the administration's primary responsibilities.

"I was a little surprised," Councilman Chip Henderson said earlier this week about the proposed contract to be discussed at Tuesday's council meeting. "It triggered some questions [such as] what was the need for having to bring them in? Why do we need to bring them in? And what was the process of bringing them in?"

The administration wants to hire the PFM Group to teach city departments how to budget for outcomes, which is the common private-sector practice of tying funding to performance. It's a reform that began in the current budget, the first after Berke's election, and was overseen by Chief Operating Officer Andrew Kean.

Kean has submitted his resignation and is leaving Nov. 21. Deputy Chief of Operations Brent Goldberg, who worked with Kean on the current budget, said the budgeting for outcomes initiative in the 2014 fiscal year was only $7 million in a $212 million spending blueprint.

Goldberg said bringing in outside help to prepare the 2015 spending plan is a good idea.

"It's one thing to do it for a small portion of the budget; it's a whole other thing to do it for the entire budget," he said.

City Councilman Larry Grohn said that misses the point. The city doesn't have a handle on the current budget, much less next year's budget, he said.

"Are we having to spend this money because Mr. Kean couldn't handle it?" he said.

Stacy Richardson, Berke's chief adviser, said the PFM proposal is unrelated to Kean's departure.

Council Chairman Yusuf Hakeem said the administration has struggled to explain its new budgeting process to the public and, whether Kean or a consultant, someone has to repair the lapse.

"A person can have a doctorate degree, but if he doesn't express it in the measure that the average citizen can understand, I question if that is beneficial," Hakeem said. "We want to see some outcomes that would say to the community we're investing their money in an appropriate, positive way."

The administration sent out requests for a consulting firm Sept. 3, two weeks after the City Council unanimously approved the 2014 budget.

Goldberg said PFM Group, which already is being paid $100,000 to study the police and fire pension fund, was chosen because it is the most qualified of three companies that made proposals.

If the council gives its OK, the firm will work on the 2015 budget. It will ensure the staff understands the process of the new budget, integrate budgeting for outcomes, introduce the process to all levels of government including City Council and all elected officials, and provide guidance for tracking dollars and results.

PFM's proposal says it will work closely with Berke's chief operating officer. Berke hasn't said anything yet about Kean's replacement.

Councilman Ken Smith said he asked the administration what the city will gain from a contractor. He said he was confident Kean could have implemented budgeting for outcomes on his own, because that's his expertise.

Smith doesn't doubt the need to hire a consulting firm but said he'd like some clarification.

Councilwoman Carol Berz, chairwoman of the Finance Committee, said she wants to know if the consulting firm is needed to help implement the budget or to evaluate how the city is doing so far with implementation.

"I'm not ready to say it's all bad or all good," she said. "I'm trying to find what is the thinking behind it?"

Contact staff writer Joy Lukachick at or 423-757-6659.