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MRSC has joined with Toni Nelson, Small Cities Specialist, State Auditor's Office, Tracey Dunlap, Director of Finance & Administration at the City of Kirkland, and Mike Bailey, Finance Director, City of Redmond, to bring you the "Finance Advisor" column. The "Finance Advisor" will feature a new article each month with timely local government finance information and advice you can use.*
How to Effectively Use Consultants – The View from Both Sides
February 2009
By Tracey Dunlap, Director of Finance & Administration, City of Kirkland
Prior to becoming the Director of Finance and Administration for the City of Kirkland, I was a financial consultant to municipal agencies across Washington for many years. Since making the switch from the private sector to the public sector, I have made a number of observations that I thought might be useful when you consider whether or not to use consultants and some tips on how to have a successful experience (or in financial terms, how to get the most for your money).
Consultant Selection
There are a variety of reasons why jurisdictions may choose to use consultants, including specialized expertise, experience with a variety of agencies and approaches, and as additional resources to accomplish tasks that staff does not have the capacity to complete. Even in tough economic times, it can still be the right decision to hire outside expertise. In selecting a consultant, there are a variety questions to ask yourself:
- How much experience do they have with the subject matter?
- What do they know about you and your circumstances?
- How successful have they been with others (references)?
- Do they have the resources to get the job done? and
- Can you afford it?
Many choose (or are required) to conduct a competitive process to acquire the information to make a decision, including proposed scope of work, interviews, and reference checks. Some decide to use consultants that they are familiar with, that have been referred to them, or that know their City. What approach is right for you is a matter of the issue to be addressed, the political environment (does your Council want to have a totally impartial look, so someone who has worked with you in the past might be excluded or do you want someone who has already gained the trust of your elected officials?), and a variety of other factors. Make sure to refer to state procurement laws and your own procurement rules to see what approaches you can (or must) consider and use.
Scope of Work
Once you select a consultant, then what do you do? One key to success is a strong scope of work. Some elements of a good scope of work include defining deliverables, the number of formal meetings expected, roles (both yours and theirs), and schedule. I’ll expand a little on two of these elements: roles and schedule.
Understand Your Role
Do you understand your role in the project? Usually the client’s role includes providing required data (it’s good to identify the specific information needed up front to the extent practical), reviewing work products (including how much time you will have to turn them around), and scheduling meetings (especially with elected officials and/or the public). Remember that you know your jurisdiction better than they do, so:
- Review the work in detail to make sure they are interpreting the information you provided them correctly;
- Ask questions, especially things that you think that management, elected officials, and the public will want to know; and
- Provide them with perspective on the politics of your elected body and who might be most engaged in this issue – forewarned is forearmed.
Develop a Realistic Schedule
It is also important to provide a realistic schedule. Give them lead time – advance notice of what you need and when – remembering that they may be busy on a variety of projects (which is a good thing in general), so the earlier they know your needs, the better they can meet them. If you commit to dates to provide those elements for which you are responsible, it is reasonable to expect that, if you miss those dates, the consultants due dates may need to slip. Recognize that they may use junior staff (at a lower cost) to do a portion of the leg work, which can be mutually beneficial (more capacity for them, potentially lower cost for you). However, even if they are in demand, that doesn’t mean you shouldn’t receive the support of those with the experience you are purchasing. A good consultant may not be able to respond to every request immediately, but it is not too much to expect that they will get back to you quickly to tell you when they can respond to your needs.
If I Knew Then, What I Know Now ...
I had done consulting work for the City of Kirkland for many years before I assumed my current position (and I’m assuming I did a pretty good job, since they hired me!). It has been gratifying to see the tools that my prior firm developed for the City have stood the test of time, but it has also been enlightening, resulting in my saying “if I knew then, what I know now…”. For example, now that I have a more in-depth understanding of how the budget is structured and how things actually work “from the inside”, I might have laid things out a little differently so that it fit more neatly within the management structure or the budget format. The result would not necessarily have been a better product, but maybe one that might fit more seamlessly into the budget and decision-making structure.
Consultants can be an important element in the success of a project, but it is important to remember that you own the overall outcome. A little preparation upfront can help ensure that it is a success.
Toni Nelson is the "Small Cities Specialist" for
the Washington State Auditor's Office, providing both on and off site
financial training and assistance to smaller cities and towns
throughout the state. Ms. Nelson has been working with the Auditors
office for 6 years and prior to that was the Clerk/Treasurer for a
small town for 9 years. She has co-authored the "Small Cities
Manual" a detailed reference guide for new clerk/treasurers on
governmental accounting procedures and presents numerous training
workshops throughout the state for AWC, WFOA, WMTA, WMCA and
local/regional organizations such as EWFOA and SCWMCA. Ms. Nelson is
also a member of and conference track coordinator for the WFOA
Education Committee.
Toni can be reached at 509.228.9346 or at nelson@sao.wa.gov. For more information, see the Small Cities Assistance Program page on the State Auditor's Web site.
Mike Bailey is currently the Finance Director for the city of Redmond. Previously he worked as Administrator of Finance and Information Services for the city of Renton and as the Director of Finance for the city of Lynnwood. Mr. Bailey also served as president of the Washington Finance Officers Association and is the Vice Chair of the GFOA Budget Committee. An experienced CPA and GFOA budget reviewer, Mr. Bailey co-founded the annual Budget and Fiscal Management Workshops held each summer. Mr. Bailey conducts numerous workshops and has authored various articles on local government finance, including Effective Budgeting in Washington State Cities published by the Association of Washington Cities.
Tracey Dunlap, P.E. is the Director of Finance & Administration at the City of Kirkland. Prior to joining Kirkland in 2006, she was a principal and shareholder in FCS Group, a regional financial and management consulting firm (14 years). An industrial engineer registered in the state of Washington, she has worked with jurisdictions throughout the Northwest to develop and implement cost recovery and fee strategies, set utility rates, and improve organizational efficiency and effectiveness. Tracey's experience also includes working for a large defense contractor (5 years) and a major financial institution (3 years). She has presented on a wide array of topics for organizations including WFOA, APWA, APA, WABO, and AWC.
*The Articles appearing in the "Finance Advisor" column represent the opinions of the authors and do not necessarily reflect those of the Municipal Research & Services Center.