Budget season is just about over, but the Memphis City Council is currently reviewing where it can save money and where it can make money.
In April, the mayor presented broad recommendations from a $700,000 efficiency study conducted by Deloitte Consulting. Among the study's recommendations were closing several library branches, hiring more civilians to work at the police department, and reorganizing the fire department. Last week, the City Council's public safety committee heard from several division directors on the report's specifics and what — if any — recommendations they felt could work.
But the committee also heard a presentation by the city attorney's office on how increasing fines and fees could actually make the city more money.
"I see a good number of opportunities for the city to raise the amount of revenue it collects," city attorney Elbert Jefferson said.
In a report from the Revenue, Credits, and Collections Committee — originally chaired by former city attorney Sara Hall — recommendations included increasing animal service fees and increasing use and occupancy fees, among others.
Though the council directed the administration to look at fines and fees several years ago, the report noted that many of the codes and ordinances were passed before 1970 — and many of the fees hadn't changed since then.
"Given an increase of 333 percent in the Consumer Price Index between 1970 and 2000, a $20 fine in 1970 would equate to a $6 fine in 2000. Alternatively, an inflation-adjusted fine of $20 in 1970 would be $66 in 2000," read the report. "Clearly, for those fines, fees, and licenses that have not been updated since enactment or approval, their impact has been dramatically eroded by the general rise in prices for urban consumers of all goods."
The study cites the metro alarm fee as one opportunity. The initial alarm registration fee is $30. The renewal fee, however, is just $5.
"When I write a $5 check for my alarm fees, I know that it costs more than $5 to process that check," Councilman Jack Sammons said.
Jefferson said that the fees should be restructured to cover both the direct departmental costs — such as salaries or supplies — as well as indirect costs associated with human resources or the legal department.
"Given the stability and predictability of most division and department budget requirements, setting fees, etc., in anticipation of requirements prevents budget shortfalls and minimizes the impact of unanticipated events," read the study.
So, could some of the city's departments become self-sufficient? It's an interesting idea. When Mayor Willie Herenton presented the initial efficiency-study recommendations, he said the report lent credibility to the city's operations, but he seemed slightly dismissive of its findings.
"I don't know any government in the country that can purport to be excellent in every operation. ... I think all governments work on a daily basis to make themselves better," he said. "Consultants can come in and do studies, but we're the ones who have to run this city."
For instance, out of the city's $500 million operation budget, the consultants found roughly $18 million in savings, most of it from the fire services division.
"[Fire services] director [Richard] Arwood would tell you if we implement these recommendations, we would have a dramatically different fire service division. We have known for some time there were opportunities to reduce cost, but that wasn't what we wanted to do," Herenton said.
I guess it's only natural to sound a little defensive when someone comes in and tries to tell you how to run your city. But Herenton's right. Increased efficiency isn't always best.
No matter how many lessons government tries to learn from big business, there is one key difference: With the government, the bottom line isn't, well, the bottom line. Government has a different end game, one which includes public safety, education, and law enforcement.
But the efficiency study shouldn't be dismissed. Consultants might not be the ones who "run this city," but if the fines and fees show anything, it is that some things run on autopilot. If a fee can stay the same for three decades (if not four; it is 2007, after all), it's not a bad idea to take a closer look.
The council's public safety committee is expected to hear efficiency-study recommendations for parks and libraries July 10th. The committee was supposed to discuss the two areas at its last meeting, but it ran out of time.