The symmetrical glass and steel towers of 588 Bell Street dominate Belltown’s skyline. These dual monoliths, approved in June of 2012, received a generous amount of additional height courtesy of the City of Seattle’s inventive zoning policy, whereby developers receive increased square footage in exchange for payments to build affordable housing. In the case of 588 Bell Street, the city approved 183,800 square feet of additional floor area when the project was approved in June of 2012, which should have equaled a payment of $3.4 million dollars. Only problem is the city forgot to collect and for four years the absent payment went unnoticed until a performance audit uncovered the lapse. The city ultimately received the payment, with interest, for a total of $3.7 million paid in full on Nov. 4, 2016.
This story of a successful performance audit underscores the impact a culture of performance auditing can have, and the need for the City of Seattle to engage in them more often.
Performance audits assess the effectiveness of programs, make sure programs are accomplishing their goals efficiently, and make recommendations on how programs can be improved. At King County, a biannual performance auditing plan is crafted by the King County Auditor, in coordination with the King County Council, identifying programs and departments to be assessed before the next budget. This aggressive approach ensures that no particular department or program goes too long without being looked at. For illustration, under the publicly available 2017-2018 plan King County intends to conduct performance audits of the Best Starts for Kids Levy, the Community-Based Relicensing Program, The Office of Law Enforcement Oversight, and the departments of Permitting and Environmental Review, Elections, and Public Defense, just to name a few examples.
By contrast, Seattle’s performance audits usually are driven by requests of individual city council members as issues come to their attention, instead of mandatory and regular auditing plans like King County. These audits tend to focus on the implementation of specific programs rather than the wholesale evaluation of entire departments. The earlier mentioned audit of 588 Bell Street, for example, was part of an incentive zoning program audit requested by Councilmember Mike O’Brien.
In terms of expertise, skill and professionalism, there is little difference between the auditing offices of King County and the City of Seattle. Both are award-winning (there are literally national awards for performance auditing) and exceptionally diligent. King County’s Office comes in a little larger with 16 staff to Seattle’s 10, and both offices produce reports of the utmost reliability.
However, it would be wise for the Seattle City Council to emulate King County’s systematic approach of assessing entire departments on a regular basis pursuant to a detailed, public and well-crafted plan, as opposed to the ad-hoc system currently used. The recent drama over the downtown streetcar, where the city underestimated costs by over $100 million, emphasizes the importance of proactive planning in assessing ongoing performance. A city government with dozens of executive departments and a general fund of over $1 billion should be finding problems early in the process through regular assessment, not scrambling at the last minute to make adjustments spurred by whistleblowers or the whim of a councilmember.
Throughout this year, Mayor Jenny Durkan has made it clear she intends to run a tight ship, and performance auditing can be a useful tool to do it. An ounce of prevention is worth a pound of cure.
This new city auditing work plan could be created in the fall during the annual budget process, with a goal of producing recommendations to be adopted in the following budget cycle. That has been the virtuous cycle of King County’s auditing practice, which has helped stave off disaster from crushing revenue strains. Over the last three years, King County’s auditing practices have saved $127 million in one-time impacts and identified $13.6 million in annual ongoing savings.
The Seattle City Council should also increase the staffing and resources of the Office of the City Auditor to a similar level of King County, with an emphasis on retaining auditors with essential specializations. For example, the City’s IT expenses grew by 188 percent, or $26.7 million, between 2008 and 2017 as all aspects of work and government became more digitized. The city should work to attract more auditors with a specialization in IT systems to make sure those increased investments are being appropriately evaluated.
The return on investment of the Seattle City Council adopting these changes will be considerable. Just as an example, that audit of 588 Bell Street mentioned above was completed by two auditors earning annual salaries of $115,834 and $68,363 respectively. Their work recovered $3.7 million for the taxpayers on the one project not to mention shedding light on nine additional development projects where payments to the City were, on average, nine months late. That is a massive return on investment.
It is unlikely that performance auditing in and of itself will produce the resources necessary to address the crippling homelessness crisis, shortfalls of affordable housing, or critical transportation infrastructure needs, but it cannot be denied that it will help. At the very least, it will restore critical trust between the Seattle City Council and their increasingly frustrated constituents. As Councilmember O’Brien told the Seattle Times last year in reaction to the results of his audit: “the idea there was that kind of money sitting out there is pretty crazy.”
Exactly, and who knows how much more is sitting out there waiting to be found?
The writer works for the city attorney's office; the views are his own.