Retiree Health Insurance

Posted by jsaino on May 16, 2013

May 16, 2013

Last Monday I wrote about the coming train wreck in health insurance premium increases. Today I want to point out a change that could save the City of Memphis millions of dollars in the coming year and in the future.

Again I point to the Shelby County government as a model of fiscal responsibility. In June 2007 the Shelby County government passed a resolution to provide for OPEB benefits and approve changes to health insurance benefits to employees and retirees.

Shelby County acknowledged that the Government Accounting Standards Board issued Statement No. 45 (GASB 45) and that the new standard recognized that the expense must be recognized as the benefits are earned rather than as they are paid. The resolution went on to say that the County’s actuaries calculated the annual required contribution to be $49 million, a $36 million dollar increase over
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Posted in budget, City Council, Financial, health care, History, OPEB    

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Health Care Train Wreck

Posted by jsaino on May 13, 2013

May 13, 2013

Health care costs at the City of Memphis, Shelby County and MLGW are very expensive. Shelby County has been fiscally responsible in the past and their situation is much better than the City of Memphis. MLGW’s health care benefits are much richer and more expensive but they have the income from your utility bills to pay the tab. The City of Memphis is the worst. Active employees’ and retirees’ share of the cost is not fully funded to the 30% level as they are supposed to be. Also the City’s OPEB fund for retiree health care is an empty bucket to the tune of $1.2 billion dollars unfunded liability.


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Posted in budget, City Council, Financial, health care, MLGW, OPEB, Property, Taxes    

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Look At What The MLGW Has In Store For You Smart Meter Users?

Posted by jsaino on May 06, 2013

May 6, 2013

The question is not should we buy 60,000 smart meters. The real question is should we buy any smart meters.

There is one benefit of smart meters that the MLGW claims that is true and that is less meter readers. Regardless of what the MLGW says, The Federal government through TVA will be calling the shots and it is about control and your loss of freedoms. Nationally, smart meters have delivered unemployed meter readers and a deluge of meter data that utilities have no idea what to do with. They delivered little or nothing of value to the consumer. The smart meter also delivered a public increasingly soured on the smart grid, which came to be perceived as a “bait-and-switch” by industry and politicians.

 

It is a question of Trust. Do you trust the MLGW, the City Council, the Tennessee State Government, the TVA and finally the National
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Posted in Agenda Items, City Council, Expenditures, Financial, MLGW    

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Is Atlanta A Pension Reform Model For Memphis?

Posted by jsaino on May 02, 2013

May 2, 2013

Atlanta (the core city) is much like Memphis. (The metro area of Atlanta is split up into four counties and has a much larger population than the Memphis metro area.)

Still the comparison is interesting. Atlanta has a core population of 432,000 and Memphis has a population of 652,000. Both core city populations have fallen over the last ten years. Atlanta has 6647 city employees (2224 police, 1021 fire). Memphis has 7568 employees (3028 police and 1862 fire).

Atlanta made some changes to their pension system. Following the bullet points are the actual words from their most recent CAFR (Comprehensive Annual Financial Report). The most important points are:

  • In 2001 they put new city employees (other than fire and police) on a defined contribution plan.
  • Then in 2011, all current employees in the traditional defined benefit plans had to contribute an extra 5 % (up to 12 or 13% of salary) to keep their promised benefits.
  • There is a new defined contribution plan for fire and police and certain employees below grade 19 for employees hired after September 1, 2011 that is quite interesting. There is to be a cap on City contributions and other cost sharing provisions. See below.
  • All in all, these are some major changes. It is significant that Atlanta has finally recognized that defined benefit plans are no longer supportable and changes must be made. Employees must take the same market chances that private sector employees take. In other words your future retirement depends on the success of business and capitalism, not government.

 


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Posted in budget, City Council, Expenditures, Financial, MLGW, OPEB, Pension    

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The Budget Beast-Reform Or Put It On A Diet

Posted by jsaino on Apr 29, 2013

April 29, 2013

I heard City Councilman Jim Strickland recently talking about the upcoming budget hearings. He is chairman of the budget committee. He has a tough job as it is difficult to get seven votes to pass any significant cuts.

His suggestion seems to be to put the budget beast on a diet. In other words, the County Assessor has predicted that the new property tax assessments will be down 4-1/2%. Jim wants to let the pot of property tax money fall by this amount which would mean a reduction of about 3-1/4%. The Mayor, on the other hand, wants to increase property taxes rates by 28 cents or 9%. Faced with those
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Posted in Appraisals, budget, City Council, Expenditures, Financial, health care, OPEB, Pension, Policy Proposals, Property, Taxes    

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Can Kicking Experts

Posted by jsaino on Apr 23, 2013

April 23, 2013

I have gone to the posted 2014 City of Memphis budgets (Operating and CIP) and here are some of the items. In the Mayor’s letter concerning the operating budget here are some of the things he said.

This FY2014 budget is a balanced budget that can also essentially be termed as a “continuation budget” in the sense that the level of services provided for in the FY2013 budget are essentially the same.


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Posted in budget, City Council, Expenditures, Financial, health care, OPEB, Pension, Property, Taxes    

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The Smart Meters Vote Is Here

Posted by jsaino on Apr 17, 2013

April 17, 2013

The MLGW will vote tomorrow on smart meters. If it passes, it will then go to the City Council.

There is a lot to like in the technology of smart meters. The collection of billing data from the smart meter system can save money by not requiring meter readers. It also can give a better picture of the system and can be helpful in restoring outages and helping the overall stability of the system.

However what I do not like about the future of the system is the following.

1)    Regardless of what MLGW says, MLGW will not control the eventual use of smart meters. This will come down from the Federal Government through TVA and the State of Tennessee. What the Federal government wants is to control your use of electricity, gas and water in the name of global warming. They will do this with time of day rates. They have already regulated the use of coal and
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Posted in Financial, MLGW    

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April Fool’s Day 2013-The Tax Man Cometh

Posted by jsaino on Apr 15, 2013

April 15, 2013

Hurry and write those checks and get them into the post office. Also more good news, the City Council and the County Commission start budget discussions. I have looked at the proposed 2014 County budget and compared it to the 2009 adopted budget. The 2009 adopted budget (countywide total) was $1.12 billion. The 2014 proposed budget is $1.17 billion.

The county up until the recent last few years has done a good fiscal job compared to the City of Memphis. The real problems are down at City Hall. However, I do not like the trends I see on the current County Commission which is looking more like the City Council.

Looking at the expenditures, it is obvious that the main items are personnel and education.

Let’s start with personnel. This is the real areas of possible savings. However, can seven votes be garnered to cut salaries and benefits? The figures show that the average city and county salaries and benefits are 50 to 60 percent greater than the average
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Posted in budget, City Council, Education, Financial, health care, OPEB, Pension, Property, Schools, Taxes    

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Pension Reform Facts Versus Misinformation

Posted by jsaino on Apr 11, 2013

April 11, 2013

Here is a recent reply from a reader to a blogpost that I wrote called “Pension Reform Must Come Soon”.

I would like to address the reply post that the reader wrote.

Well let’s look at some of these?
a. Not fully funded, means if all of the employees retired today, it would be under funded.

He is saying that the actuaries are incorrect in their actuarial assumptions about underfunding. He is saying that the underfunding is only important if everybody retired tomorrow and wanted their full pensions the day after tomorrow. Look at Detroit and Stockton, California. The judges ruled that they were bankrupt.
b. The city doesn’t have to deposit its part into the pension fund, if the fund is in the black. Back in the 90′s they didn’t make deposits
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Posted in City Council, Expenditures, Financial, health care, Pension    

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Educational Competition Is The Answer

Posted by jsaino on Apr 08, 2013

April 8, 2013

I was very disappointed to see that some kind of state wide voucher program may not be passed this year. It should be across the board and available to every family regardless of income. After all, it is the taxpayer’s money, not the government’s money.

The large bureaucratic educational monopoly gives us the result that all monopolies produce. That is an inferior high cost product, the education of our children. One thing that it does very well is produce lots of high paying jobs with fancy titles, good pensions and high end benefits.

The educational bureaucracy continues to say that we must spend more for inferior results. They have one thing in mind, protecting their jobs and protecting the union dues that go to the politicians they help to elect. They fear competition because wherever competition from home schooling, vouchers and charter schools have been in place, such competition has produced positive results which show up the public education lie.


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Posted in Education, Policy Proposals, Schools    

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