Redding efficiency study’s initial results identify $1.2 million available to return to general fund

Initial findings from Redding’s efficiency study have identified about $1.2 million that was previously assigned for purposes where it is no longer needed, making the money available to be returned to the general fund. 

The findings were presented at Tuesday night’s city council meeting, and they’re essentially funds that already exist in other areas of the city’s budget that aren’t being spent or weren’t already expended and can be moved elsewhere to relieve financial strain.

Late City Manager William Tarbox initiated the process of the citywide efficiency study shortly after he assumed office in February. He received council approval to use $300,000 to hire consulting firm Circle 6 to identify cost savings for the city, which has been struggling with its budget, especially when it comes to the general fund, a pot of money that can be used for a broad number of city purposes. 

Interim City Manager Michael Webb presented what he referred to as “quick wins” from the study last night, which include $1.2 million that will be returned to the general fund and another $13.1 million to other funds including the enterprise fund, where water and electric user fees are held.

The initial returns found through the efficiency study are only a small fraction of the city’s $556.6 million budgeted expenditures. The general fund makes up a fifth of the overall budget, while enterprise funds make up over half. 

The millions in freed funds identified through the efficiency study came from a variety of sources, Webb said, the largest being “carryovers,” which are funds or budget appropriations that weren’t spent in one fiscal year and carried over to the next. Other funding sources include stale encumbrances, or a budget portion that was set aside to pay for future obligations but never spent, and dormant Capital Improvement Project funds. 

Council member Jack Munns noted that conversations around stale encumbrances and closed-out contracts were already had prior to Circle 6 pointing them out, and that processes to move funding around were already underway.

Another source of freed-up funds are the city’s vacant positions and a hiring freeze, which has been in effect citywide since the beginning of this year. Webb said there are currently 16 vacant positions, which is saving the city hundreds of thousands of dollars.

A more comprehensive assessment of findings from the efficiency study is expected to be presented by Circle 6 staff on Sept. 15. Circle 6 Principal Nathan Sprague attended last night’s meeting virtually and shared a few thoughts after Webb’s presentation. 

“Tonight’s mostly about the quick wins, and they matter, but they’re not the whole story,” he said. “We really believe the greatest long-term value’s gonna come from the more complex operational and structural changes that you’ll see us discuss on the 15th.”

Those operational changes could include updates to the city’s financial processes and elimination of vacant positions.

During the public comment portion of the efficiency study discussion, community member Robert Sid argued that the city should be more focused on finding recurring annual savings to improve the budget in the years to come rather than on one-time fixes. 

“Why are we paying an outside consultant up to $300,000 to identify financial and management issues that our existing management structure should already be identifying?” he asked. 

“Finding old money is one thing,” he continued later in his speech. “Identifying management failure that allowed it to sit there and fixing that failure permanently is what I would expect from an efficiency study.”

Mayor Mike Littau asked Webb if long-term efficiency processes are included in the final results of the study, to which Webb said that is a priority. 

The next city council meeting will be held on Sept. 15 at 6 p.m. at the Redding City Council Chambers. 

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