When he was running for mayor of Sacramento, Kevin Johnson said he wanted an outside audit of Sacramento city government. Well, now he's mayor, and he's well on his way to getting such an audit.
The question is whether he is too much on his way toward accomplishing his objective. It's a question members of the City Council should bear in mind.
Last Tuesday, Johnson's office announced that the consulting firm of Alvarez & Marsal had agreed "to conduct a top-to-bottom review of the city's finances."
With the city facing a huge hole in its budget, such a review is certainly in order. And the financial terms of this proposal are appealing.
A&M will not charge the city for a two-week analysis in which it will identify key areas for savings. After the no-charge evaluation, A&M will identify potential savings for a flat fee. There will be no charge if the city does not adopt recommended changes that save at least twice that amount.
Before that can happen, though, the mayor must bring the A&M proposal to the council for approval. And that's why the council should be paying attention.
No one would dispute that Alvarez & Marsal is qualified to do the work. A&M is a well known national company with a long record. It has worked with numerous governmental clients, including school systems in New York, New Orleans and St. Louis. It is currently handling the restructuring of Lehman Bros. and Washington Mutual.
But is it the only firm in the nation that is qualified? Wouldn't the city be better off soliciting proposals from other companies before making a decision?
Single-bidder contracts are a bad way for a city to do business, no matter how qualified that bidder may be. That's a good principle for council members to remember and for the new mayor to learn as they begin to wrestle with Sacramento's financial problems.
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