The City of Hamilton found out the hard way;

A scathing audit suggests City of Hamilton departments routinely overspend consulting budgets, pay for unneeded work and improperly account for tens of millions in spending.

Coun. Sam Merulla said the report “reinforces” his belief some city departments rely too heavily on consulting work, period. “My contention is we hire staff and project managers because they have particular expertise … they should be doing the work.”

Councilor Merulla makes a point I have thrown at city hall in Sioux Falls several times, why have expensive 6-Figure a year staff that just hires out the work anyway, especially in our Engineering and Legal departments? I have often suggested to pick one or the other. The suspicians I have is that the city departments like to use consultants to justify expenditures and fees we don’t really need. Increasing water rates or an indoor pool are great examples of how we use consultants to stick it to the taxpayers. It’s time for the city council to take a deep look into our consulting budget and also are use of mid-management. I think we should cut one or the other, or better yet, both.

In some circumstances, I would agree, but we know what kind of love affair this mayor and department heads have with consultants and special interests. I hope the next mayor cleans house.

The Gargoyle Leader does a story on the City’s professional services expenditures. See my coverage of the story and the actual audit here.

Staggers said one item in particular concerned him.


The city has paid nearly $400,000 in the last three years to Advanced Engineering and Environmental Services Inc., a North Dakota firm that has done water rate studies for the city. The city conducted a rate study several years ago concluding that Sioux Falls needed major rate increases over the next several years.

You have to pay someone $400,000 to tell you the percentage you should increase water rates? Give me $100, a calculator and 20 minutes and I could give you the answer. Talk about a prime example of the kind of waste that comes out of city hall.

Being the good soldier he is though, Mark Cotter defends the expense;


Mark Cotter, the city’s director of public works, said the firm does more work for the city than just rate studies. Cotter also said the use of outside consultants is cost effective for taxpayers. The city can tap experts in niche fields for specialized work.

“After that,” Cotter said, “you don’t have to have them on your payroll.”

Considering analyists in Sioux Falls make about $50,000 a year they consider it a waste to taxpayers to have someone like that on the payroll for 8 years? Whatever.

I also found it ironic that the Gargoyle decided to wait a week to print the story under the fold on a Monday, with no links or graphs. I’m sure it had nothing to do with this figure;

Publishing Budgeted for 2009: $297,240

Obviously the Gargoyle doesn’t get all of that money, but they do get a nice chunk.

So I will give you an update (watch video here).

As I predicted, Dave was absent from the meeting (go figure) must have been working on his deposition for the Red Light Camera lawsuit.

It all started with Councilor Staggers wondering why this mysterious memo about the audit never reached him- then a circus of finger pointing started, the only thing that was missing was a seltzer bottle, monkeys and a roaring lion. They really need to install a popcorn and roasted peanut machine at Carnegie Hall.

Staggers asks the auditor what process is used to pick consultants and professional services, he says “They don’t always use a request for proposal” In other words, some of them are just handpicked by the mayor or department heads. Now that’s fiscal responsibility and accountability, isn’t it?

Towards the end, Vernon Brown rears his head and points out that consulting fees only are .2% of the total budget this year. (but fails to mention they have doubled in 3 years. Yeah, Vernon, What’s the diff if they cost us $500,000 or $1 million? It’s only .2% of the total budget.

It’s important to note that the total amount of professional services is over 12% of the total budget ($34 million). I guess Vernon forgot to bring that up in the meeting.

I have often wondered if I am in the wrong line of business – I think I want to become a consultant in our state.

“We have quite a few communities on board, with commitments so far totaling around $130,000,”

The coalition, which includes representatives from Watertown to Elk Point, hopes to raise $200,000 for its study.

One I-29 community that has committed financial support is Madison, which has pledged $25,000 from the city and the local economic development corporation,

He also is asking the state of South Dakota to contribute $50,000 toward the study.

I do think the study is a worthy cause, but I wonder why it can’t be done by city and state employees or contracted through both of our universites that already get state money. It seems we are quick to hire outsiders all the time.

Fire up the government burn barrel.