Wherefore Art Thou, Auditor?

Expert insight could help with budget crisis

At more than 400 pages, deciphering a city budget can be like trying to decode DNA. That’s why Eugene needs an independent auditor to examine it, figure out where and how much money the city could save and make it more sustainable, according to city councilors past and present and a former Eugene budget clerk.

Gerry Merritt, a retired computer science instructor who worked as a clerk in the city’s budget office for 14 years, says the budget is complicated enough that Eugene could benefit from an external auditor. He says that an auditor could figure out the answers to questions such as why the capital funds budget increased by millions of dollars, and where the city is repeatedly budgeting for expenditures it’s not making, which Merritt says is a fairly common practice in most cities.

Understanding the budget and where money can be saved is key as the City Council and voters ponder Measure 20-211, the city services fee.

“The published average salary and benefits for a city of Eugene full-time equivalent is over $90,000,” Merritt says. “If a few of those budgeted positions are not ever filled, the cost savings can be material.” A list of city vacancies — jobs on the books that have been budgeted for the Fiscal Year 2013 budget but were unfilled as of February 2013 — includes the equivalent of 96.22 full-time positions. An auditor could help evaluate which positions need to be filled, which don’t and which might be able to wait a year or two.

The city of Eugene may have eliminated the equivalent of 113 full time positions from Fiscal Year 2009 to Fiscal Year 2013, but it also created 38 new positions valued at more than $2.4 million. It might be predicting a $6 million shortfall, but the city has overstated shortfalls before, and spent money from past supplemental budgets almost equal the current shortfall. Many city workers received not just cost-of-living adjustments but raises during the time that the city has been focusing on budget reductions.

This level of complexity might be what budgets are supposed to look like, but some think the laypeople on the budget committee need more help to find efficiencies and strategies to create a sustainable budget.

Advocates of hiring an auditor, from city councilors to Merritt to average Eugeneans, say that it’s not illegal behavior or malfeasance that they expect to find; they think an outside eye could improve the city’s budget situation by combing complicated documents like the budget and comprehensive annual fiscal report for efficiencies and identifying strategies that wouldn’t lead to shortfalls or city service fees. Right now, the city has an auditor who ensures the budget complies with Oregon law and generally accepted accounting procedures, but no outside party examines it to look for efficiencies or possibilities for structural change.

“My experience on the budget committee is that currently we have minimal checks and balances, and I think that that situation has become more extreme in the last four or five years,” says progressive former city councilor Bonny Bettman McCornack, spokesperson for anti-city-service-fee group Citizens for Truth, Justice and the American Way. “In looking over those budgets, the budget process has become much less transparent, much more truncated.” She says those checks and balances could come from an independent external auditor, a budgetary expert who could insist that more information be available and know where to look. If you’re focusing on the tip of the iceberg, she says, sometimes you aren’t even certain what information to request or what questions to ask.

The city manager’s proposed Fiscal Year 2014 budget was released May 10. “It’s 176 pages, whereas the adopted budgets are more than 400,” Bettman McCornack says. “The financial summaries contain no breakdown, no line items.”

City Councilor Greg Evans says that he’s opposed to the city service fee because the city hasn’t exhausted alternatives to the fee. “I think that we need to have a broader community conversation about the long-term revenue issues that the city, county, Springfield and all local governments in this area are faced with,” he says. “How can we combine administrative services across jurisdictions to get the kind of savings that I believe is necessary to get sustainable local government?”

Evans says he thinks that economic reclamation is going to be slow process, and if maintaining Eugene’s current service level is a goal, then it’s a long-term solution that we should seek, not the five-year delay in changing some parts of how the city works that the fee is asking for.

It’s time for an independent auditor to work on the city’s budget processes and strategies, says City Councilor George Brown. He says he’s attended talks by a Portland auditor who conducted auditing in Portland’s police department. That auditor was able to help them find efficiencies and change processes that helped the cops get a handle on their expenses.

Brown and Bettman McCornack say that one example for the need of an auditor can be seen in the plan to rebuild City Hall. Brown requested some information in advance of the beginning of budget deliberations May 23, including the total amount of funding saved to rebuild it, but he hasn’t received it yet. The two councilors say it’s difficult to tell how much money has been taken from the general fund to rebuild City Hall because the money is in multiple funds. Evans says that since the money came from the general fund, it’s probably wise to consider putting it back and reprioritizing.

“I think auditor information would make it easier to sort things out,” Brown says, much like doctors use specialists to interpret DNA. “We can’t fix the structural problem between now and July 1. That’ll have to begin starting in July.” In the meantime, he says, “We could at least look at funds where we could cover all the shortfall and most proposed program cuts. That’s what I was looking for, and I’m pretty sure it’s there.”