Budget Time at the City of Memphis. Oh Happy Day!!
I have spent some time going through the 2010 City of Memphis adopted operating budget. The 2011 budget process will be beginning soon. I have some thoughts on this and I list what I have found. (I have the summary of the 2010 budget that breaks apart the various departments and facts and is easy to read).
- Looking back on past documents, I found that the funded staffing level for FY2005 was 5545. The population of Memphis in 2005 was 671,929. In 2009 the population had grown by 2099 people to 674,028, a growth of .003%. However the city staffing level had grown to 6123, a growth of 10.4%. I suggest that the City Council should tell Mayor Wharton to cut the staffing level by a minimum of 7% for a savings of $30 million. I am proposing cutting everything but the police which are up by 145 positions since 2005.
- I question the sewer fund summary. Why did the payment on debt service jump from $6.4 million in 2008 to $15.3 million in 2010?
- The Park Services should be examined for savings by turning the park service back over to a civilian board as it was before the City Council took it over. This takeover in 2000 by the City Council managed to spend $4 million on the Whitehaven Country Club at the insistence of Tajuan Stout Mitchell and $1.5 million for Riverside at the insistence of Edmund Ford. Hardly anyone plays golf on these courses and they continue to lose money. Also the contract with the Riverfront Development Corporation ($2.2 million) should be examined as to its services and value on the downtown parks they manage. An immediate study should be made of each city golf course and tennis facility to determine operating cost and revenue (they have this data annually for each facility). For instance, my recollection is that the Whitehaven (indoor) tennis center always has been a loser because it gets almost no use. Then with that information in hand a decision should be made on each golf course and tennis center individually.
- The OPEB (Other Post Employment Benefits) situation should be examined as well as the health insurance for current employees. We are spending $93 million on this and there was a report that the retirees are not paying the full 30% that they are supposed to pay on the premiums.
- The unfunded liability for OPEB for Memphis is $934 million, up $77 million dollars in one year. We have promised to put up a laughable $5 million in 2010 to start to fund this unsustainable promise. We need to cut this 70% funding ratio (70% city versus 30% retirees) by at least 5% a year so that the retirees have time to prepare for the inevitable non funding of this empty political promise.
- Employees benefits should be cut as there is no private sector firm that gives up to ¼ of the year off by offering employees after 15 years, 2-1/2 sick days per month (that is 6 weeks), 5 weeks vacation after 25 years, 11 holidays and other bonus days. This ¼ off per year means that the City must hire additional personnel to get the work done.
- Vehicle Inspections costs $1.6 million and should be restricted to emission testing only and could be contracted out.
- The Community Enhancement Division, especially grounds maintenance and City Beautiful should be examined for performance and necessity. Grounds maintenance and City Beautiful work could be contracted out.
- The $700,000 dollars for urban art ($100,000 for each of the seven council districts) should be dropped. This was left over from a cancelled CIP project.
- A public/private pension task study group for the City and the MLGW, similar to the ongoing one for the County should be instituted to consider a revised future new pension plan for new and non vested employees that is sustainable and affordable. Due to financial market conditions, the present plan may not be affordable in the future.
These are just some of the items that should be considered. I am sure others will come forward with additional savings. Local financial conditions will not allow the City Council to just trim around the edges of what the administration presents. We must attack the real problems which are too many employees, doing things that the city should not be doing, overly rich benefits, needed pension reform and revised unfunded OPEB promises.