City approves $460,000 contract for outside help on budgets

The city's spending board agreed Wednesday to a $460,000 contract with a consulting firm to develop a 10-year financial plan for Baltimore.

The contract with Public Financial Management calls for a "comprehensive examination" of the city's budget options, including reducing the property tax rate, officials said. The plan is due in nine months.

The city's finance department produces three-year projections for the city budget but does not have the capability to perform the work that the private consultants will perform, a spokesman for Mayor Stephanie Rawlings-Blake said.

The financially strapped city has been grappling with budget problems, and city analysts are predicting a "significant" shortfall in the coming budget cycle. On Tuesday, the National League of Cities released a report documenting declining revenues for cities across the country.

Rawlings-Blake, who first proposed the study in her annual State of the City speech, ordered a "top-to-bottom" review of employee health and pension benefits with comparisons to other jurisdictions over a 10-year period.

"Together, as a city and community, we must answer some fundamental questions," she said in a statement. "What programs can we live without?"

The mayor's office said Public Financial Management would provide an "independent" perspective for dealing with problems caused by persistent unemployment and drops in tax revenue.

The firm, which previously has analyzed city police and fire pensions, won a competitive bid process for the contract, mayoral spokesman Ryan O'Doherty said. The report would be the first of its kind for the city.

"These are extremely complex actuarial analyses that would need to be done, and the city doesn't maintain on its own staff that type of actuarial capability," O'Doherty said.

He described Baltimore, with its 15,000 workers, as a "$2.4 billion municipal corporation," with complex finances and employee benefits.

"Like any major corporation, from time to time [the city] is going to have to rely on outside expertise to develop something of this magnitude," O'Doherty said.

Baltimore Sun reporter Liz F. Kay contributed to this article.

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