The City of Memphis OPEB Solution?

Posted by jsaino on Jan 03, 2017

 

January 3, 2017

 

OPEB is Other Post Employment Benefits. This means retiree medical expenses and life insurance.

Mayor Strickland has been wrestling with this problem for some time including his stint on the City Council before he became Mayor. He is trying to solve a tough unfunded liability problem that has been brought about by the City’s (and I mean past mayors and past city councils) refusal to face the problem since 2007. In 2007 the government accounting standards board warned the city and the county as follows.

“The Governmental Accounting Standards Board issued statement No. 45 (GASB 45) Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions; GASB 45 requires that other post employment benefits (OPEB) be accounted for similar to pensions in that the expense must be recognized as the benefits are earned rather than as they are paid.”

As of June 30, 2008 when Willie Herenton was Mayor and Jim Strickland was on the City Council, the unfunded OPEB liability was $857 million. The County OPEB unfunded liability as of June 30, 2007 when AC Wharton was county Mayor was $319 million.

Now fast forward to recent reports. The OPEB unfunded liability of the City of Memphis was $700 million as of June 30, 2016. The OPEB unfunded liability of Shelby County Government as of June 30, 2015 was $101 million.

WHAT IS THE CAUSE OF THE DIFFERENCE IN THE ABOVE NUMBERS?  The original cause of both the City and the County was that they allowed retirees under the age of 65 to stay on their subsidized health care plans of which the City and the County paid 70% of the premium. This was regardless of length of service or whether the retiree spouse had a private sector plan which could include the retiree or whether the spouse was on Medicare.

The county passed Item 32B on June 18, 2007 and was signed by Mayor Wharton which addressed and solved the problem. The City did nothing until the recent actions which has resulted in the reported conflict between the Mayor and retirees. Mayor Strickland has come up with his solution “Explaining the path to pre-65 health subsidies”.

The real blame for this huge problem of unfunded liability is the non-action of past City Councils and past City Mayors since the 2007 notice contrasted to the actions of past Shelby County governments. City Mayor Wharton should have known better and past City Councils should have had more courage and foresight.

In the future I will post City, County and MLGW health care costs and let you compare them to what you will be paying privately. I would appreciate your thoughts on these matters.

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Why Is Government Purchasing So Complicated?

Posted by jsaino on Dec 19, 2016

December 19, 2016

 

Why Is Government Purchasing So Complicated?

 

In a recent article Daily News article it was reported as follows. “Shelby County Commissioners hold their third meeting of the month Monday, Dec. 19 – and there could be a fourth, depending on what happens on one of two ordinances that would establish new programs for a larger share of county government contracts for locally owned, minority-owned and women-owned businesses.”

 

The locally owned small-business contracts ordinance establishes that 20 percent of the annual purchases of goods and services by county government will be awarded to locally owned small businesses.

 

A local County official told me the following.

 

The Locally Owned Small Business (LOSB) ordinance was passed in 2007 and established a target of 20% of all purchases to be awarded to LOSB’s. There is a bidding advantage for LOSB’s of 5% for contracts up to $500,000; 3.5% for contracts up to $750,000; 2.5% for contracts up to $1,000,000 and 2% for contracts over $1,000,000.  For large construction projects we normally establish an LOSB percentage requirement.  The ordinance does not address minority or women owned businesses, only LOSB’s. The County official stated that they have met the LOSB target each year. That ordinance appeared on its way to final passage at Monday’s meeting, with a nine-vote, two-thirds majority required.

 

The voting problem comes on the ordinance for minority owned businesses. Are we willing to pay from 2% to 5% extra (or even more) to minority owned businesses to satisfy this principle?

 

When I look at the Shelby County website and at the contract reporting page it does not show the losing bids on competitive contracts nor does it show in single source contracts an explanation of why there is only a single source.  I have no problem with paying up to a 5% extra over a limited period (say 2 years) until the minority firms gets their feet on the ground. But the taxpayers should know the facts of the winning and losing bidders and how much extra it is costing the taxpayers to satisfy this minority purchasing principle.

 

Minority firms need to learn to compete for public and private business but we need to open the purchasing records to the public and to make the process easier for firms to bid on public business without all the red tape and paperwork that it now requires. What do you think?

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Is Tenure In Education A Good Thing?

Posted by jsaino on Dec 13, 2016

December 13, 2016

Is Tenure In Education A Good Thing?

 

There was an article yesterday in the CA concerning the question of how to get rid of bad teachers and how the Shelby County School System (SCS) rates. The report is from the Thomas Fordham Institute. Although the SCS system is rated “Difficult” to dismiss an ineffective teacher, it is still much better than the famous “rubber room” teachers of the New York City school system.

Working people who have to make a living in the private business world are faced every day with the truth that their jobs depend on several things, that is their skill level in marketable skills (computers, medicine, electrical, mechanical etc. etc) and the general business environment which is growing or not. Unions were formed and grew when management abused their power and held wages down regardless of skill level. The principle of tenure (job security based on years of service) is a part of the local teachers’ union contract. Management would like to have job security based on a teacher’s skill level. The union therefore wants provisions in their contract that somewhat protects teacher dismissals from something other than a lack of teaching skills.

Now comes along charter schools, private and parochial schools, home schooling and vouchers. All of these alternatives do away with the tenure principle and job security depends on teaching skill level. With the probable increase of charter schools and vouchers under the Trump administration, the future of tenure will be probable.

This change is coming at the K1-12 level. I have always thought that the real abuse of tenure is at the higher university education level. Real reform should come at this level and let those tenured professors, who in many cases go off the rails on political opinions, face the real world job market based on their marketable skills. Maybe then the price of higher education will come down and the outcome of this college education will improve. What are your thoughts?

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What Is The Best Way To Educate Little “SHUTUP”

Posted by jsaino on Dec 05, 2016

December 5, 2016

What Is The Best Way To Educate Little “SHUTUP”

Last week I wrote about Betsy DeVos, the possible new  federal Secretary of Education. She favors competition in education by giving parents a choice between public, charter, private or parochial  schools with the education tax money following the student.

I received a number of thoughtful replies some of them heart wrenching.  One person told me about a young child in first grade when asked his name said it was “SHUTUP”.  Apparently this is not an uncommon happening. Another person told me about two 5th grade boys that he mentors from time to time. They both see professional sports as their only future. One of those students has eleven kids in his dad’s family, and nine in his mom’s.

These stories are not uncommon and it points to the basic problem which is the breakdown of the family structure. It takes a family to raise children, not a village. I do not have the answer to restoration of the basic family structure, but the one problem that I think can be solved is to give a choice to those families that still have an existing family structure and let them choose where their children have the best chance to break out of the poverty/crime cycle that exists today.

Now some good news on SCS transparency. I sent an open records request to Superintendant Hopson asking him for data on Shelby county charter schools and the amount of money given to each. I asked that this be sent electronically and they in fact did send it electronically. I have attached it for our readers’ review. I also looked at the 2015 CAFR (comprehensive annual financial report) of the school system and found that there were 109,950 students (charter schools included) and that the amount of money available per student was $11,583 each. The charter school allocation per pupil was $7734 without transportation and $8030 with transportation. The difference obviously is the cost of the school system bureaucracy and possibly the salary and benefits to the administration employees and the meeting of federal and state regulations.

The new school system CAFR for 2016 should be available soon and I will take a look at it and report. In the meantime I would like your thoughts on the various ways forward to improve educational outcomes of our students. Improvement is critical to our future.

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Betsy Devos, Education Secretary, What It Could Mean For Memphis

Posted by jsaino on Nov 29, 2016

November 29, 2016

Betsy Devos, Education Secretary, What It Could Mean For Memphis

Recently  I got an invitation from Van Menard to visit a local charter school, Leadership Preparatory Charter School, 4190 Elliston Road, Memphis, Tennessee. The head of school is Ms Valissia Allen, a very smart lawyer born in Detroit who ended up in Memphis via North Carolina.

The visit to the school was quite impressive but I must admit that I have been in very few public and charter schools. Leadership Prep is starting at the bottom of the school age cycle with the first and second grades. They feel that they must get in on the ground floor of the learning cycle if they are to break the disastrous mold of failure of large inner city school populations like Chicago, New York or DC. The children were in uniforms, well organized and disciplined. I asked for test data to compare against other schools and am awaiting the test data to see if what I saw with my eyes can be verified with believable and understandable results.

Thinking about education you cannot help but think about the incoming Trump administration. On the campaign trail, president-elect Donald Trump made many ambitious promises. When it comes to education, Trump is already delivering with his announcement of Betsy DeVos as his pick for the next secretary of education. His choice of DeVos is a clear signal that he intends to be “the nation’s biggest cheerleader for school choice.” The effect on Memphis could be dramatic.

DeVos is a prominent and generous supporter of school choice, which includes empowering parents and local communities to take greater ownership of education policy.

School choice advocates, unlike our local school board, say increased current federal control over education policy is unacceptable. They point to wide disparities in test scores between white and non-white students as proof that urgent action is required to ensure that all students are receiving a quality education. Our local SCS board has filed an expensive lawsuit asking for greatly increased funding. Yet Washington, D.C., despite spending nearly $18,000 per pupil, has one of the worst high school graduation rates in the country. Many students cannot read at grade level. One story I was told during my visit to Leadership Prep was that one child did not know his real name as he had always been called “Hey Kid” or “Buddy”. This is the clay that Leadership Prep is trying to mold.

Here is some of what Ms. Devos proposes to do if confirmed for the Education job.

  1. Re-authorize the Washington, D.C. Opportunity Scholarship Program
  2. Have Federal Dollars Follow Low-Income Students; Not Schools
  3. Continue to Be a Champion for Charter Schools

Charter schools are the fastest growing form of public school options and increasingly popular among African American and Latino students. In some cities, successful charter schools are providing low-income immigrant families with the means to live out the American Dream.

Ever since Lyndon Johnson’s administration embarked on creating the Great Society in the 1960s, a significant sum of federal dollars have been devoted to helping the most disadvantaged students. Today, Title I of the Elementary and Secondary Education Act provides nearly $15 billion in funding for low-income neighborhood schools

Unfortunately, the funding process has grown cumbersome and complicated. More importantly, there is scant evidence that it is truly living up to Johnson’s intention of “providing a good education for every boy and girl — no matter where he lives.”

I look forward to coming changes in education policy and to fostering competition with quality charter schools in competition with public schools. What are your thoughts on public schools, charter schools and private and religious schools, their funding and their public measurable results?

 

 

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The US Constitution’s 14th Amendment

Posted by jsaino on Nov 21, 2016

November 21, 2016

The US Constitution’s 14th Amendment

I have always been concerned about people voting who are not eligible to vote as per the 14th amendment of the US constitution which was passed by Congress June 13, 1866 and ratified July 9, 1868.

Section 1 of the 14th amendment. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Wikipedia says the following abut voting eligibility.

The issue of voting rights in the United States, specifically the enfranchisement and disenfranchisement of different groups, has been contested throughout United States history.

Eligibility to vote in the United States is established both through the federal constitution and by state law. Several constitutional amendments (the 15th, 19th, and 26th specifically) require that voting rights cannot be abridged on account of race, color, previous condition of servitude, sex, or age for those above 18; the constitution as originally written did not establish any such rights during 1787–1870. In the absence of a specific federal law or constitutional provision, each state is given considerable discretion to establish qualifications for suffrage and candidacy within its own respective jurisdiction; in addition, states and lower level jurisdictions establish election systems, such as at-large or single member district elections for county councils or school boards.

Voter ID laws in the United States are laws that require a person to provide some form of official identification before they are permitted to register to vote, receive a ballot for an election, or to actually vote. Proponents of voter ID laws argue that they reduce electoral fraud while placing only little burden on voters. Opponents argue that electoral fraud is extremely rare in the United States and has been magnified as an issue to create barriers to voter registration, and that requiring voter ID in effect discriminates against minority groups and those who are less likely to possess photo IDs. Critics have argued that the barriers could result in the disenfranchisement of black, Hispanic and other minority voters. However you are required to have a driver’s license to board an aircraft, to enter City Hall and to do many other everyday things so the argument that it discriminates does not hold water.

At the federal level, the Help America Vote Act of 2002 requires voter ID for all new voters in federal elections who registered by mail and who did not provide a driver’s license number or the last four digits of a Social Security number that was matched against government records.[1] No state required a voter to produce a government-issued photo ID as a condition to voting before the 2006 election. Indiana in 2006 became the first state to enact a strict photo ID law, a law that was upheld two years later by the U.S. Supreme Court.[2][3] As at September 2016, 33 states have enacted some form of voter ID requirement.[2][4]

Voter ID laws have been controversial in the United States. In 1999, Virginia was the first state to generate controversy when it attempted to implement a pilot voter ID program. The proposal was killed by the Virginia Supreme Court.[5] Since 2012, 17 states have instituted voting restrictions.[6] By 2016, 10 states enacted new voting restrictions (not all requiring voter ID).[7] Lawsuits have been filed against many of these requirements

Tennessee

Identification Requirements to Cast a Ballot

Tennessee law requires that all voters must present a government-issued photo ID containing the voter’s name and photograph at the polls, whether voting early or on Election Day.

Acceptable forms of ID include (even if expired):

  • A Tennessee driver’s license with your photo;
  • A U.S. passport;
  • A photo ID issued by the Tennessee Department of Safety and Homeland Security;
  • A photo ID issued by the federal government or Tennessee state government;
  • A U.S. military photo ID; or
  • Tennessee-issued handgun carry permit with your photo.

You may NOT use:

  • College student photo IDs;
  • Privately issued photo IDs (such as discount club cards or bank cards); or
  • Photo IDs issued by other states or by county or city governments (including library cards).

You are exempt from the ID requirement if:

  • You are voting absentee by mail;
  • You are a resident of a licensed nursing home or assisted living center and you vote at the facility;
  • You are hospitalized;
  • You have a religious objection to being photographed; or
  • You are indigent and unable to obtain a photo ID without paying a fee.

If you do not provide an acceptable government-issued photo ID, you will be required to vote a provisional ballot.  In order to have that provisional ballot counted, the voter must return to the election commission’s office to show a valid photo ID within the 2 business days following the election.  Upon returning to the election commission office, the voter will sign an affidavit and a copy of the voter’s photo ID will be made to be reviewed by the counting board.

If you are a registered voter and do not have a government-issued photo ID, the Department of Safety and Homeland Security will provide you with a photo ID at no charge.  You may obtain a free photo ID to vote from the Department of Safety and Homeland Security at a driver service center.  In order to obtain this ID, you must provide:

    • Proof of citizenship (such as a birth certificate);
    • Two proofs of Tennessee residency (such as a voter registration card, utility bill, vehicle registration/title or bank statement); and
    • If your name differs from that on your primary ID, proof of the changed name (such as certified marriage certificate, divorce decree, certified court order, etc.)

It seems to me that as a nation we must do more to make sure that our elections are decided by the votes of American citizens and a reasonable, uniform, verifiable and free form of voter ID is necessary to insure fraud free elections. Look at the map of the states and only a few red states have strict photo ID laws. Then look at the huge number of states with no voter ID to vote such as California, Nevada, Oregon, Illinois, New York and many more. What are your thoughts about this situation?

 

 

 

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The Case For and Against The Shelby County School System Education Suit

Posted by jsaino on Nov 14, 2016

November 14, 2016

The Case For and Against The Shelby County School System Education Suit

 

I have reviewed the Shelby County School System (SCS) complaint and the answer by the State against the suit. Also I have reviewed the case brought by Hamilton County and several other Tennessee counties. Here are the essentials.

SCS claims that the State and the Defendants have breached their duties to provide a free, adequate and equitable education arising under the Tennessee Constitution and Tennessee statute.

The Defendants responds that “with regard to their duties and responsibilities and duties, the applicable Tennessee law and constitutional provisions speak for themselves.” The constitution says the following.

The state of Tennessee recognizes the inherent value of education and encourages its support. The General Assembly shall provide for the maintenance, support and eligibility standards of a system of free public schools.

The SCS then goes on to a list of what they call “Relevant Facts”.

They point out that the SCS has made drastic cuts because of a lack of funding and that this lack of funding has directly impacted the SCS system’s ability to provide all of its students with a free, adequate and equitable education pursuant to the Tennessee Constitution and Tennessee statute.

The complaint goes on to list of job cuts caused by funding cuts. They list that their students are mainly African-American, Hispanic and Asian-Americans. They also complain that there are students of non-U.S. origin  and students with disabilities. Also they complain that schools in the District have extremely high poverty rates.

The SCS case is mainly based on their opinion that the State must provide sufficient money per the Basic Education Program (BEP) to guarantee all Tennessee children their constitutionally mandated outcomes.

 

General Overview of the BEP

  • The funds generated by the BEP are what the state has defined as sufficient to provide a basic level of education for Tennessee students. This basic level of funding includes both a state share of the BEP and a local share of the BEP.
  • The BEP has three major categories (instruction, classroom, and non-classroom), each made up of separate components related to the basic needs of students, teachers, and administrators within a school system.
  • Student enrollment (average daily membership) is the primary driver of funds generated by the BEP.
  • There are 45 BEP components most of which are based on student enrollment (ADM). For example, students per teacher, assistant principals per school, or dollars per student for textbooks.
  • Unit cost adjustments (salary, health benefits, insurance) are essential to maintaining a similar level of funding from year to year, due to inflation. For example, in 2006 over 100 million new state dollars were required to maintain full funding of the BEP.
  • The funds generated by the BEP are divided into state and local shares for each of the three major categories (instructional, classroom, non-classroom).
  • The state and local share for each school system is based on an equalization formula that is applied to the BEP. This equalization formula is the primary factor in determining how much of the BEP is supported by the state vs. the local district.
  • The equalization formula is driven primarily by property values and sales tax, applied at a county level. For example, the state and local equalization shares for County System A would be the exact same state and local shares for City System A, within the same county
  • All local school systems are free to raise additional education dollars beyond the funds generated by the BEP.

 

Let’s face it. Education and family are the keys to life success. However there is no guaranteed outcome. The children from educated and wealthier families have a built in advantage. However I know of many instances where these children have blown their advantage and ended up without success or happiness. Our recent election has pointed out the problem we have with the influx and the obligation of educating children of illegal immigrants. We have an obligation to educate them but it obviously drains the available resources.

My opinion is that we need to stick to the basics. Teach children to READ, WRITE AND ADD/SUBTRACT. Give the parents the option to send their children to public, charter, private or religious schools using our education taxes as long as they all meet the state educational standards. But we cannot turn over our taxing authority to local school boards. They must compete with other educational venues and let the winners be those schools that produce the best results.

 

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Lack Of Transparency At The Shelby County School System

Posted by jsaino on Nov 07, 2016

Lack Of Transparency At The Shelby County School System

 

The Presidential Election tomorrow highlights the absolute importance and necessity of Open Records and Transparency. The lack of transparency is putting our constitutional system of government in great jeopardy.

Locally, in late October I sent an email to the Superintendent of the Shelby County School system as shown below.

I would like to view the following documents. I would also like copies of these documents (in electronic format if available) or paper if not available in electronic format. This is in Davidson County Chancery Court case 15-0355-I. Thank you for your prompt reply. 

08/31/2015 Complaint Petition

03/30/2016 Unopposed Motion for Withdrawal and Substitution of Counsel for Plaintiff

05/09/2016 Defts’ Unopposed Motion for Extension of Time Within Which to File Answer

07/08/2016 Notice of Substitution of Counsel for Defendants

I received an answer as follows from Ms. Kasheena Byers, legal assistant to the SCS legal department. “Your request is denied. SCS does not have any documents responsive to your request.” Obviously she was mistaken or did not want to respond.

I then went to the Davidson County Chancery Court and looked at their website. All of the requested documents were on their website and available. Obviously the legal department at SCS also had copies of these documents.

I have attached the original suit by the SCS system (filed 8/31/15) and their notice of substitution of Counsel. I have also posted a similar suit filed by the Hamilton County School system (filed 3/24/15) before SCS System filed their suit.

Now I have several questions. Why did the SCS System not respond honestly to my open records request and Why did they not join the similar suit filed by Hamilton County School System rather than spending Hundredsj of Thousands of dollars to file their own suit?

These two school systems believe that MORE MONEY (with them setting the tax rate) is the answer to our educational system and their obvious failures. I believe that in this country we spend more than any other country in the world and get second class results. We need a new educational system giving parents a school choice of where their tax money should be spent, public, charter, private or religious schools. Also the Shelby County School System should open up their document files and give taxpayers easy access to all information that is not restricted by the Tennessee open records law.What do you think?

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What Is The Cost Of Minority Purchasing Efforts?

Posted by jsaino on Nov 01, 2016

November 1, 2016

 

No Subject causes more heat input and less useful locomotion than minority purchasing policies by all public tax supported governments. Look at what we spend just at the City of Memphis. It is difficult to pull together the total cost of these efforts but the 2017 City of Memphis adopted budget shows $895,000 dollars under the title “EQUAL BUSINESS OPPORTUNITY AND DEVELOPMENT PROGRAM”.

Shelby County Commissioners voted to rehire consultants Mason Tillman Associates at a cost of $80,000 to help rewrite the county’s procurement procedures.

The 8-4 vote followed a debate on whether a consultant was needed, whether it could be done locally and whether the contract included litigation support.

Mason Tillman conducted the county’s $310,000 disparity study, which analyzed purchasing data from Jan. 1 2012 to Dec. 31, 2014. They found that contracts went overwhelmingly to non-minority males and that 55 percent of the contracts were awarded to firms outside of the county.

Commissioner Steve Basar, who along with Mark Billingsley, George Chism and David Reaves voted against the contract, said there was probably someone locally or even with county government who could follow the recommendations of the study to provide the same services.

The contract did not include litigation services, which Commissioner Heidi Shafer saw as a grave omission.

If the county is sued, she said, there’s no way of knowing how much Mason Tillman will charge to serve as an expert witness.

She abstained from the vote.

However, Commissioner Van Turner emphasized that the law requires that race-based purchasing policies be “narrowly tailored” and it will likely be challenged if not done properly.

The commission seated an ad hoc committee to rewrite the county’s purchasing policies, which include the creation of a minority/women business enterprise program.

 

A new study released found that disparity between city of Memphis contracts awarded to minority- and women-owned firms and white-owned firms increased since the previous study six years ago.

The study by Atlanta-based Griffin & Strong found the city’s disparity index increased in the period between 2010 and 2014 from the period between 2003 and 2008 in all categories except “other professional services.”

The index is calculated based on the difference between minority and women-owned business enterprise (MWBE) utilization and availability.

Griffin & Strong made several recommendations, including that the city increase the staff working to reduce the disparity, take control of the certification process, and plan for MWBE spending during the budgeting process.

Joann Massey, director of the Office of Business Diversity & Compliance, said she will incorporate some of the recommendations into a new Equal Business Opportunity ordinance that’s in the works.

Griffin & Strong was paid $331,620 to create the study, the city’s first since 2010.

 

My position on the participation of minorities and small business enterprises is from the standpoint of a taxpayer. I want each multi bidder contract to be awarded on the basis of lowest and best price. Lowest is not always the best way to go. I remember a contract at the MLGW on underground electrical distribution cables. I voted to award the contract to a firm whose cables had a much better record on cable failures than the low bidder. Lower maintenance cost for the higher quality cable was the right answer.

 

The problem now is transparency in the bidding process. The City and the County show the winners of competitive bids but they do not show the losing bids or the names of the bidders . Also non competitive bids (single source) do not have an explanation of why the awarded bidder is the only available source.

I want minority and small enterprise firms to prosper and learn how to compete in the real world market place earning both public money contracts and private enterprise business. However let us stop with the expensive studies and concentrate on simplifying the qualification process and open up the bidding information so the taxpayers can know who the successful bidders are, who bid but did not get the award and if a premium was paid for the successful bidder, an explanation. What are your thoughts on this process?

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E Mails From Public Officials

Posted by jsaino on Oct 24, 2016

 

October 23, 2016

I recently sent out an email concerning how I was going to vote in the upcoming November 8th election (www.memphisshelbyinform.com). I then got a few emails from government officials explaining why I was wrong on my recommendation to vote against these two items.

Shall the Shelby County Charter be amended to require both the County Mayor and County Commission’s approval to dismiss the County Attorney from office?

 

Shall Sections 691 (4) and 693 (4) of the Charter of the City of Memphis, Tennessee be restored and amended to require distribution only to the general fund of the City, before any distributions of tax equivalents to the County under state law, of that portion of any Electric or Gas Tax Equivalent Payments calculated and determined by the Council under state law or agreement with the Tennessee Valley Authority, equal in amount to the City taxes assessed and levied on the fair market value of properties of MLGW electric or gas divisions situated within the corporate limits of the City of Memphis in the same manner and as if said properties were privately owned?

I, BRIAN COLLINS, DIRECTOR OF FINANCE FOR THE CITY OF MEMPHIS DO HEREBY CERTIFY THAT THE NET ANNUAL INCREASE IN REVENUES TO THE CITY IF THIS AMENDMENT IS ADOPTED IS ESTIMATED TO BE $5,000,000.

I got an email from County Commissioner Heidi Shafer as shown below.

“I got your email, and wanted you to see why the county would benefit from merely having the approval process for dismissal as we have for hiring.  The County Attorney is to serve both branches, but that has been far from the case for over two years…BTW, the mayor has authority to veto our appointments…

I believe in checks and balances.” I greatly respect Heidi and her good work in keeping the county fiscally responsible. However I believe this good Mayor and his record has been better than the County Commission and the rancor we see in their various squabbles. I believe the Mayor should retain his authority to dismiss the County Attorney without cause as is currently in the County Ordinance.

Section 2.12. Approval of nominations.

All nominations by the mayor for any board, commission, agency, authority, chief administrative officer, county attorney, public defender, or divorce referee shall be subject to the approval and consent by resolution of the board of county commissioners.

The county mayor, subject to approval by resolution of the board of county

commissioners, may create or abolish major divisions of county government with each division having a division director. The chief administrative officer, the division directors of the county, the county attorney, the public defender, and the divorce referee shall be appointed by the county mayor, subject to approval by resolution of the board of county commissioners, and shall be subject to dismissal by the mayor without cause, and shall be residents of Shelby County at the time they assume the duties of their office and at all other times while serving the county in such capacity.

Now as to Section 691 and 693 of  the City Charter I got the following emails.

“Dear Mr. Saino:

Thank you for your inquiry about the City referendum. I’m sorry for the delay in responding to your inquiry.

The purpose of the referendum is to restore provisions in the City’s charter that were originally added in 1939. The provisions required that the City’s general fund receive MLGW PILOTs based on City taxes on MLGW properties within the City of Memphis as if those properties were privately owned.

In 2015 the Tennessee Courts held these charter provisions were repealed because they interpreted the language of the City’s charter to be in conflict with a 1987 State law. This amendment corrects the language of the charter provisions consistent with what the Courts required, which explains its complexity. As amended, the prior charter provisions will be given the effect as intended and applied from 1939 to 2015.

“To address your specific concerns, this amendment benefits Memphians. It does not effect the surburban municipalities. It does not change the total PILOTs paid by MLGW for the benefit of all eight taxing jurisdictions in the County and therefore will not cause any MLGW rate increase.

What it does is restore the status quo allocation between the City and County that existed before the 2015 Court decision. While this status quo allocation will eliminate the arguable increase due the the County as a result of the 2015 Court decision, it restores a fair allocation for the City.

You indicate that the PILOT should be allocated based on the revenue received in the City vs the County. I am advised that the state law, the TVA agreement and the City’s charter do not allocate PILOTs using situs based revenue; the PILOT is not an income tax equivalent, but an ad valorem tax equivalent. However, if it is based on income, we have been provided information from MLGW that the revenue earned from City MLGW customers is more than 72% for electric and 81 % for Gas. By any other measurement,there is no justification for a 22.5% allocation to Shelby County; for example,  69.73% of the County’s population is in the City and 11.77% is in unincorporated Shelby County. 74% of all electric assets are in the City as compared to 14% in unincorporated Shelby County; the percentage of gas assets in the City is even greater 82% vs. 8.23%.

As you know MLGW’s major distribution assets are located in the City’s streets and rights of way, which bear an undue burden from MLGW utility cuts. Despite paying an overlapping tax the County of $7.78 per $100 of value, none of the $4.38 paid by City taxpayers is use to reimburse the City for Shelby County’s use of and MLGW’s damage the City’s roadways.

So if your premise is that you oppose the Charter Amendment because you think it will hurt Shelby County, I respectfully disagree. The Amendment benefits Memphians and I for one cannot imagine why any MEMPHIAN would vote against the amendment because of some perceived effect on unincorporated Shelby County.

In any event I trust I have explained why I voted for the referendum, why I am voting FOR it and why I am enthusiastically urging my constituents to vote FOR it. If you would like more information a detailed explanation is on the Council’s website.

Patrice Robinson Memphis City Council

Now I am under no illusions that this will not pass as Brian Collins is promising $5 million dollars more from somewhere. However I am always suspicious of money that comes from somewhere other than the other party (the county) or the taxpayer. My objection was based on a lack of pre vote public discussion. No doubt it will pass as free stuff always wins as our national elections prove.  Also the City Council weighed in on this issue with the following email to yours truly. No doubt it will pass but now you have the City side of the issue. The County side may end up in court in a lawsuit.

Council is Unanimous: Vote FOR the Memphis Charter Amendment

City of Memphis sent this bulletin at 10/22/2016 07:51 AM CDT

Good morning Memphians,

Your City Council hopes that you will exercise your civic right to vote this upcoming November 8th, or beforehand by absentee ballot or early voting, which started this week and runs through November 3rd. No City offices are up for election this year, but the City Council did vote 11-0 (with two absent) on July 19th to add a Charter Amendment Referendum on this ballot. See this example of what that will look like for you.

As evidenced by the Council’s unanimous vote, we believe you should vote “FOR” the amendment. Despite its technicality (Full Explanation), this amendment is simple: we needed to make some legalistic changes to the Charter to realign ourselves with state law and receive our fair share of MLGW’s PILOT payments each year. If this vote fails, $5 million that should go to the City budget will instead go to the County. A vote “FOR” won’t raise your taxes. A vote “FOR” won’t raise your MLGW bill. (Other FAQs here) As we see it, the choice is clear for every Memphian.

If you want to know even more, follow those links to our website, or you can always call our office at 901-636-6793 for more details.

We hope this helps you make an informed decision this election day, and we sincerely believe you should vote “FOR”.

Sincerely,

Your Memphis City Council

Bill Morrison – District  1

Frank Colvett, Jr. – District 2

Patrice J. Robinson – District 3

Jamita Swearengen – District 4

Worth Morgan – District 5

Edmund Ford, Jr. – District 6

Berlin Boyd – District 7

Joe Brown – Super District 8-1

Janis Fullilove – Super District 8-2

Martavius Jones – Super District 8-3

Kemp Conrad – Super District 9-1

Philip Spinosa, Jr. – Super District 9-2

Reid Hedgepeth – Super District 9-3

 

 

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