Sleepless Or Desperate In Memphis

Posted by jsaino on Apr 24, 2017

Sleepless Or Desperate In Memphis

April 24, 2017

 

I must admit that I have been sleepless since reading about the Airport expansion and the Pop-Up Park project reported recently in the CA.

As a taxpayer, the Airport Authority and the Riverfront Development  Corporation are two of my least favorite organizations.

First the Airport Authority. This is a big time operation in terms of expenditures but look at the results.

In the year 2000 we had 10.6 million total passengers. In 2007 we had about the same numbers of total passengers. In 2013 we had 5.5 million passengers. Yet in 2001 they were planning the three story parking garage addition. In 2007 they stated in the CAFR that the new garage would proceed at a cost of $70 million dollars. Forward to 2009 and read the Memphis Business Journal article about the new $150 million dollar parking garage. Where did the money come from? $20 million from the Federal Aviation Administration, $50 million from the Tennessee Department of Transportation with the remainder in airport authority bonds. Get the picture. The Federal and State money is free money (it really is taxpayer money) and must be spent regardless of the benefits of the investment.

Then in 2014 here is what was reported.

Memphis International Airport lashed back Thursday at last year’s de-hubbing by

Delta Air Lines with a $114 million plan to shrink the facility but improve the

experience for airlines and passengers.

Airport managers presented plans to spend $3 million tearing down a fourth of the

gates and $111 million upgrading much of what remains. They propose to consolidate activity into a refurbished and expanded B Concourse, mothball remaining gates in the other two terminals and leave ticket lobbies and the front of the airport unchanged.

Now we read the following.

Airport unveils $214 million plan

Memphis International Airport proposes to spend $214 million over five years on a transformative project that will build all-new passenger facilities in the airport’s oldest concourse.

Airport officials on Thursday unveiled a redesign of a three-year-old preliminary concept for B Concourse modernization and said the price tag is up about $100 million from what was previously estimated.

Airport president Scott Brockman said the new number is “all-in,” including non-construction costs and improvements that will help minimize impact on passengers when the B Concourse is shut down for reconstruction in 2018.

The modernization, which should begin in early 2018, will focus on expanding a majority of the B Concourse’s gates, leaving one section the same size but updated. It will literally raise the roof and blow out the exterior walls on the reconstructed sections, increasing ceiling height to 14 to 19 feet from nine feet and widening the concourse by about 30 to 40 feet.

If anyone can make sense of all these expenditures and where we are heading, please let me know.

It seems to me what we need is lower fares combines with direct flights from Memphis to desirable locations. Recently some of my family went to Mexico for spring break. They drove to Nashville to get lower fares and direct flights. Go figure.

Considering the size of the Airport expenditures the Pop-Up Park project seems insignificant by the Riverfront Development Corporation. They want to keep their jobs at RDC and they have to come up with ideas to keep themselves relevant. Put down some basketball courts and a skating rink and then take it back up when Memphis in May is over.

What are your thoughts about these projects? I would love to hear from you.

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Our Local Apprentice Program

Posted by jsaino on Mar 22, 2017

March 22, 2017

 

President Trump met recently with Germany Chancellor Merkel and he praised the German apprenticeship programs and indicated that he wanted something similar for the United States.

During my business career in metal manufacturing I had to deal with the local lack of trained employees in the various manufacturing skills. We needed welders, sheet metal workers, tool and die craftsmen, electrical technicians and smart draftsmen.

During this period (the 1970s and 80s) I traveled to Europe to various trade shows to see what was the latest technology in our field. I was particularly impressed with German and Swiss products and the well trained people who produced them. Their system was fairly rigid and based on education and testing at various levels of education. Depending on the results of the testing, students went on various paths. Some went on to prestigious universities, some went to colleges and many went to trade and skill training. This system resulted in a well trained and skilled work force.

Now locally we have the opportunity to form a similar program in the mid-south. Recently there was an article in the CA about Moore Tech (William R. Moore School of Technology) and the possibility of an auto mechanic training program involving the local auto dealers association and Moore Tech with the possibility of training and certification leading to well paying jobs in the range of $50,000/year to $150,000. Moore Tech has a high graduation rate (in the range of 80%) compared to 10% or less for institutions like Southwest Tennessee Community College.

The problem is that the Tennessee Promise program pays tuition for all students attending state owned community colleges in Tennessee but Moore Tech, which is a non profit system, is excluded from Tennessee promise. This makes no sense due to the obvious difference in graduation rates. Hopefully this exclusion will be corrected in the current legislative session.

Another problem is getting the Shelby County School system to cooperate and lease unused school facilities at a nominal $1.00 rate per year. There is a sign at the Shelby County School System headquarters that says “EVERY DAY, EVERY CHILD, COLLEGE BOUND”. It should say “EDUCATE EVERY CHILD TO REACH THEIR FULL POTENTIAL”. That potential could be planning space exploration or fixing that car that does not work right. Both are important.

We should ask the current Tennessee legislature to include Moore Tech and similar high performing job training programs in Tennessee Promise funds.

Let us find what works. What are your thoughts?

 

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The Targeted Generation

Posted by jsaino on Mar 14, 2017

We have all read about and many of us have experienced credit card and even bank irregularities. Hopefully we are aware of the scammers, hackers and fraudsters as we live in the electronic age of banking and credit devices.

I try to be vigilant but it is not easy to keep up with these electronic artists. I charge most items on a well respected credit card (capital one). They seem to be vigilant and their fraud detection software seems good. If some charge is large and outside of my normal shopping pattern they alert me immediately. I have had to change credit card numbers several times over the last few years and that gets to be a problem when you pay bills automatically against your credit card (e.g. donations, MLGW bill etc.).

Recently I have had problems with my credit card at Kroger. It is a chip card and they had to try it three or four times before it accepted the charge. I asked Capital One about the problem with Kroger and they said that some companies had not kept up with security software changes. Then all of a sudden while checking recent charges on my credit card account I found that my card had been put on hold. When I called, they told me that the address on my driver’s license did not match my current credit card address. (We recently sold our house and moved into a retirement community). They told me I had to send them a pdf file for the following items by secure email.

 

A) Both sides of my driver’s license. B) My social security card. C) Some bank document showing my new address. Then to top it off, the security person said:

“YOUR GENERATION IS BEING TARGETED BY SCAMMERS”.

It is no doubt true but it did make my blood boil.

I did send them the documents by secure email and then I had to wait 72 business hours to get the card reinstated. Is it worth the trouble?

Some of my friends have gone to all cash payments for shopping, meals, groceries etc. That has its’ own problems including physical security and now the government is looking hard at anyone who regularly gets large currency bills from the bank. Think drug dealers.

Am I the only one who is concerned about these scammers? My daughter and son in law work for the VA and, of course, the VA had a huge loss of personal information (social security numbers, birth dates etc) to hackers. They had their credit cards compromised and went thru a similar reset, luckily without financial loss.

I would love to hear your thoughts, scammer and hacker stories and solutions.

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Could Mandatory Military Service Help Our Youth

Posted by jsaino on Mar 07, 2017

March 7, 2017

 

When I was young I was faced with mandatory 6 month military service and with a following service in the reserve. Looking back on that time and seeing the current problems with youth education and crime I have come to the conclusion that the re-institution of six months to one year of military service could benefit our youth in several ways.

I am in no doubt that the current political climate would probably not vote for such a change. But look at several factors. It seems to me that the current youth situation has several problems, namely lack of education, discipline and family structure. The military could provide all three elements for at least a significant number of our youths.

I think back on my military experience. When I graduated from high school (1951) I went on to college. When I graduated from college I was required to serve six month of military service including BASIC TRAINING. I went to Fort Jackson, South Carolina and it was somewhat of a shock. I went by train from Memphis to South Carolina and it took at least 24 hours to make the trip. I arrived in early morning and the drill sergeants were waiting for us and marched us of off to Fort Jackson. Several months later I was a new person.  I was in great physical shape, I learned how to make up my bed, I learned how to scrub large pots and garbage cans and to clean out the dreaded grease trap. I also learned how to get along with all types of people of all races and religions.

After basic training I was sent to Ft Benjamin Harrison in Indianapolis to finance school where I learned basic finance. More importantly I learned how to type which has been a lifelong benefit as computer came along.  The most important lesson I learned was discipline, organization and love of country.

Now it seems to me that many of our current youth could benefit from such a program. A dose of discipline, vigorous exercise, education and race and class mixing could benefit some of our current youth. Now the next question is should women be included? As the father of four daughters my reaction is that it would not hurt and might be of benefit.  Switzerland has mandatory military service for all able-bodied male citizens who are conscripted when they reach the age of majority, though women may volunteer for any position.

 

What are your thoughts?

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The Memphis Police Situation

Posted by jsaino on Feb 28, 2017

I read Mayor Strickland’s weekly update (https://mail.google.com/mail/u/0/#all/15a4e354e56b4a71) and it was a very thoughtful and informative article on the Memphis police staffing, recruitment and benefit situation. He blames the current shortage of uniformed officers on two things. One was the Memphis pension and OPEB (other post employment benefits, mainly retiree healthcare) unfunded liability. The unfunded liability was so massive that the State of Tennessee Comptroller threatened to take over the city unless it was addressed. This was in 2014. In order to meet this funding requirement retirement healthcare benefits had to be cut and more and more officers decided to retire or resign.

I have written in the past about this situation and it was the fault of past city of Memphis mayors and past city of Memphis City councils that ignored the 2007 GASB 45 regulation that required that pension and retiree health care expenses be recognized as they are earned rather than as they are paid. The Shelby County government did the right thing and the City of Memphis did not and hence the 2014 year of reckoning.

We all want and need good and effective policing as Memphis is earning a bad reputation for violent crime. I want Memphis to hire more qualified officers and apparently Mayor Strickland is moving in that direction. There is one more thing he can do which will help in the future and that is to stop the abuse evident in the City of Memphis pension board. This abuse is the number of LINE OF DUTY DISABILITY approved by this board. In the past I have compared the number of line of duty disability approvals from Memphis to the MLGW and Shelby County. The approval in Memphis is 10 times higher per active employees than Shelby County and the MLGW. Line of Duty disability approval gives the disabled employee a pension of 60% of his highest average salary tax free for life.

The City of Memphis in 2011 had 429 people on line of duty disability costing the City $11.8 million per year. In 2016 the figure is 510 people costing $14.7 million. Compare this with the MLGW employees. In 2008 they had 37 people in this status costing $523,000 per year. In 2015 they had 34 people in this status costing $485,000. Shelby County in 2015 had only 17 line of duty retirees. Compare that to 510 for the City of Memphis. Clearly there is a problem at the City of Memphis and it goes to the Memphis Pension Board and it’s makeup of members. The membership of this board and its rules need to be changed. The numbers of line of duty retirees at the City of Memphis when compared to the MLGW and the County clearly show a problem and the problem should be addressed. Qualified new officers should be paid whatever the market requires but obvious abuses of the system should be stopped.

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Moving After 42 Years

Posted by jsaino on Feb 07, 2017

Moving After 42 Years

February 7, 2017

I have not had the time to publish to my blog (memphisshelbyinform.com) for several months. My wife and I sold our home and moved to a retirement community here in Memphis. Cleaning out our house after 42 years was quite a task. Luckily we have several daughters and sons in laws locally who pitched in and made the difference.

Letting go of stuff is hard. One of my daughters told me that I had two feet and 91 pairs of socks. “But I love those socks” I replied. Finally I got rid of the worst of the 91. And on and on it went. Stuff you put away and forget about. Finally I decided that the most important things were pictures and travel diaries. Even then it was difficult and we finally had to rent some local space to store excess boxes of pictures and files which I promise to go through and throw away most of the stuff and keep only those that are the most important.

My wife and my daughters made the really important decisions, what furniture, rugs and stuff to take and which to sell or give away. On moving day I swore that it would not all fit into the apartment but somehow it all fit due to their good planning. I am now convinced that we had too much space in the old house. But then we raised four daughters in that house and that required space to keep our individual sanity. Those were wonderful years as they grew up and finally left for their own lives.

I plan to get back into my comments on local government and occasionally national government as we experience the Trump years to come. I have several questions about local government and I would love to hear from you as to what questions you have about local government, education, non profits, energy, crime, Mata, business, taxes, environment and other matters on which you have questions. I am anxious to get back into local research and discussion.

Thanks for all your support as I look forward to new friends and raucous discussions.

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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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