October 4, 2012
Today, the MLGW board of commissioners will receive the 2013 MLGW proposed budget. I have not seen it yet even though I asked for it. This budget will be reviewed by the MLGW Board and eventually sent to the City Council for review and approval.
Here are my recommendations for things that should be included in the budget.
- Shelby County and the City of Memphis have at last made a change in their pension systems. Both finally changed the 25 years of service and retirement regardless of age provision but only for future employees. Shelby County did this in 2011 and Memphis did this in 2012. It is less than other financially troubled cities around the country did but it is at least something. The MLGW needs to at least do the same. Look at the attached chart of pension costs and comparisons.
- MLGW needs to cuts their health care costs as they are much higher and costly than Memphis and Shelby County. See the attached chart.
- MLGW needs to adopt a retiree medicare supplemental plan like Shelby County did in 2007. See the attached plan adopted by the County.
The MLGW does a good job in delivering utilities under the direction of Jerry Collins. But consider that the money for their pensions, active employee health care and retiree OPEB fund comes mostly from the rate payers. The low rate of your utility bills has been mainly due to low natural gas prices which is due to technological breakthroughs due to fracking. If we are forced to go to green power (solar and wind) rather than coal, oil and natural gas, you will naturally see your rates rise astronomically.
Consider the MLGW OPEB fund for retiree health care. This has a $420 million unfunded liability even though they have put in over $100 million dollars in the last four years over and above the annual cost. Consider that the City of Memphis has put in practically nothing over and above their annual cost and their unfunded liability is $1.33 billion dollars. The difference here is that for the MLGW it comes out of your utility bills and for the City of Memphis, they would have to raise your property taxes.
Let the City Council k now that your want reform for the MLGW budget.