Baltimore's spending panel on Wednesday approved a payment of $424,000 to a financial consultant to monitor the city's money-saving efforts.
The action by the Board of Estimates would bring the total payments to Public Financial Management Inc., a Philadelphia-based firm, to more than $1 million. The consultant was hired to help design the city's 10-year financial plan that includes a new trash collection fee, a smaller city workforce and cuts to employee benefits as a way to deal with a projected $750 million, 10-year budget shortfall.
The move extends the consultant's contract by one year. The consultant has been paid $585,000 to date.
City officials say they're already seeing savings. Prior to releasing the report, officials adopted the consultant's recommendations for overhauling municipal health care and, on Jan. 1, switched to a system that charges lower up-front premiums but higher out-of-pocket costs. As a result, the city expects to save $10 million in health care costs this fiscal year and $20 million next year, officials say.
Mayor Stephanie Rawlings-Blake said the public should consider the savings associated with the consultant's work.
"So far, the 10-year-plan financial effort has already saved 10s of millions of dollars by helping us do complex pension and health care reform, changes to our vehicle fleet and much more," she said. "My goal is to run the city more like a business. Every major company in America and across the world hires outside independent experts to figure out ways to cut costs, to find efficiencies and to save money. We've done the same thing. I don't want to end up like, unfortunately, too many cities because we don't have experts that are helping us right the ship."
Baltimore's finance director, Harry E. Black, said the contract extension allows city officials to call on the consultant "as needed" to help with complex financial and actuarial projections, such as those needed during the city's ongoing pension overhauls.
Twiter.com/lukebroadwaterCopyright © 2015, The Baltimore Sun