BRADENTON, Fla. - In addition to hiring a new chief financial officer, the Atlanta City Council is spending up to $850,000 to hire a team of consultants to develop and implement a "turnaround plan" in the city's finance department.
The council on Monday confirmed Mayor Shirley Franklin's nomination of Jim Glass to become the city's new CFO for $215,000 a year. He formerly served as CFO and vice president of finance for AT&T Mobility. He has an MBA from Nova University and is also a certified public accountant.
Glass replaces Janice Davis, who left in July to become CFO of the North Texas Tollway Authority.
In addition to confirming Glass, the council also agreed with his recommendation to bring on board a team to implement reforms in the city's financial management structure.
"Over the course of the past year, a number of limitations have become apparent in the city's financial processes, management, analysis, and organizational structure," said a memorandum by Atlanta's chief operating officer, Greg Giornelli.
Those limitations, he said, played a central role in creating a $41 million operating deficit in fiscal 2008 and contributed to increased pension and health costs, which totaled more than $80 million in added annual costs since 2002.
"The need to address these limitations is especially critical in light of the extraordinary uncertainty in today's economy and financial markets," Giornelli said. "As but one example of the impact of today's economy, the city's sales tax revenues are down 3% in the first quarter" of fiscal 2009.
Franklin laid off 298 employees in May to cut costs after a proposed tax increase was rejected by the City Council.
First-quarter spending and revenue numbers are not finalized and there currently is no projected deficit, Giornelli said in an e-mail.
"Right now we are - like all local governments across America - very concerned about potential revenue shortfalls," he said.
Budget difficulties last fiscal year as well as prolonged vacancies in the finance department led city officials to develop a multi-pronged strategy for a turnaround plan to be implemented in the next 14 months before Franklin's term in office ends.
The council on Monday agreed to hire Terrance Osley and Ian Cooper, who were initially identified as CFO candidates.
Osley is currently director of performance improvement and finance effectiveness at PriceWaterhouseCoopers. He will be paid up to $300,000 to assist the CFO. Cooper is a senior manager at Deloitte Consulting LLP. He will be paid up to $270,000 as an independent contractor. Both men can be terminated with 30 days' notice.
Osley and Cooper "are leaving their consulting firms but they are being hired as independent consultants full time for the city of Atlanta," said city spokeswoman Catherine Woodling.
The City Council also approved a resolution accepting, for free, planning services from Deloitte Consulting. A team from the firm's Washington, D.C., financial services unit will assess the city's core business processes, review the structure and organization used to support those processes, and evaluate the quality of the city's financial information.
Atlanta's general fund budget for fiscal 2009 is $573 million, which includes a 5% reserve of approximately $28 million. The airport, water and sewer, and sanitation departments are enterprise funds with combined annual operating budgets of $550 million.
Atlanta has a number of debt issuances contemplated, including new and refinanced airport, water and sewer, and general fund bonds. More specific details were not immediately available.
