By John Schaffner

The Atlanta City Council on Nov. 3 authorized spending $850,000 for a financial turnaround plan aimed at improving the city’s Finance Department through a review of processes and the formulation of a strategic plan to address current problems and future financial concerns.

City leaders say the implementation of the plan, which was proposed by Mayor Shirley Franklin and administrative aides, will position the city for improved financial controls and reporting. The mayor is hoping to improve the city’s fiscal management practices before she leaves office at the end of 2009.

The legislative package authorizes:

• The city to accept a pro bono services agreement through February with Deloitte Consulting to provide process review and strategic planning services. It was adopted 12-0 with substitute legislation as amended by Councilman C.T. Martin. The Martin amendment requires that Deloitte consult with the Council before the financial process review and formulation of a new strategic planning process, when 80 percent of the review and planning process is completed, and at its conclusion, as well as before its implementation.

• The appointment of James Glass as chief financial officer to oversee the Department of Finance. That also was adopted on a 12-0 vote.

• Contractual agreements with two consultants with national expertise in developing and implementing turnaround plans. Financial consultants Ian Cooper and Terrance Osley will provide a review, an analysis and recommendations to improve financial operations and policies. The council adopted by a vote of 11-2 substitute legislation from Martin that requires Cooper and Osley to appear before the Finance/Executive Committee to discuss the scope of work as outlined in contracts.

The city dipped into its reserves this year to plug a $41 million budget deficit, acknowledged some bad budgeting practices and, like many big cities, is dealing with declining sales-tax revenues.

Of the $850,000, the city will spend about two-thirds, or $570,000, on the consultants, Cooper and Osley. The rest will be set aside to hire “extra help” if necessary for the Finance Department and a consultant in coming months to propose ways to lessen the financial burden of funding employee pensions.

“These are the most difficult economic times since the Great Depression,” City Council President Lisa Borders said. “We must get the city’s finances in order and have a CFO and finance experts who are up to the task. Our citizens deserve no less.”

Borders said such measures are needed because national economic conditions have reduced local revenues, and it remains unclear when economic conditions will improve.

Atlanta is one of many U.S. cities under financial strain as a result of the economic downturn.

A survey released in September by the National League of Cities showed that 64 percent of the city finance officers interviewed said their cities would find it hard to meet their fiscal needs in 2008, and 79 percent predicted the struggle will be even harder in 2009.

City leaders say the pro bono services of Deloitte Consulting, a global financial consulting and advisory firm, offers a cost-effective way to review and execute a plan to place the city on a solid financial footing.

Both Cooper and Osley were considered for the city’s CFO position, which pays an annual salary of $215,000, but each will make more money than Glass working for the city as consultants.

In other news, the City Council approved a resolution authorizing the city to contract with KPMG to conduct an audit of the Department of Watershed Management, in an amount not to exceed $500,000.