MemphisShelbyInform

Yesterday I attended a morning meeting of the pension task force to which Mayor Ford appointed me. In the afternoon I attended and spoke at the Memphis and Shelby County Metropolitan Government Charter Commission at the invitation of the Chairwoman, Julie Ellis.

This is all very interesting and somewhat suspicious. Mayor Ford’s task force is very well organized and small enough to get some work done. We have the assistance of the Shelby County pension and retirement experts and their attorneys and actuaries. The Charter Commission is large and unwieldy and seems to be starved of resources and has a schedule so tight that it seems to me to be impossible to get the work done on time in a responsible manner for the fall election. However there is a parallel group called Rebuild Government led by Brian Stephens whose purpose is to sell this idea. This group apparently has a lot of money and has hired Zack McMillin to be their public relations guy.

I have nothing against consolidation as long as it does not consolidate the two school systems and does not overturn term limts. But my first question is “Is it going to reduce my taxes? Is the Cost of Government going to be substantially less?” They are not talking about this and have no study on the cost implications. I told them that unless they address the OPEB unfunded liability, pension reform, cronyism and bloated employment in City government and the Memphis school system and public employee benefits, consolidation will do little to lower cost of government and taxes. High taxes, crime and poor education is what is driving people out of Shelby County.

I told that that in order to sell this new charter, they should have several key items in the charter.

The new charter should include a citizen petition section allowing citizen petitions to change the charter with a signature requirement no higher than 10% of the number that voted in the last gubernatorial election (same as the requirement for a charter commission in the Tennessee Constitution) and should have at least the requirement for a supermajority in order to raise spending and taxes. Also reforms of OPEB, pensions, benefits and appointed public employees are necessary.

I have attached one of the documents that I have received from the retirement task force. I will post others at a later date.  Take a look at it and give me your thoughts. I have always thought that we should change from a defined benefit plan to a defined contribution plan and possibly that is still the best idea. However, due to the Feds wanting our social security contribution, this change is costly. The reason is that the Feds require you to furnish at least 6.2% from Shelby County and 6.2% from the employee before you can make a defined contribution. This is probably a bad investment of 12.4% considering that Social Security is broke. We are now going to look at a scaled down plan D (defined benefit) but we are still stuck with all the Plan C costs which were back loaded with benefits so that the real costs come later rather than sooner. They are counting on new plan D members to pay for plan C costs. Any new plan D would have to be approved by the Shelby County Commission.