Archive for the ‘budget’ Category

Make Memphis Great

Monday, May 28th, 2018

May 29, 2018

Make Memphis Great

What is great about Memphis?

It is a beautiful city with wonderful trees and flowers.

I has wonderful weather. Many believe that because it is built on a series of bluffs along the river, that most of the bad weather goes north or south of the City.

It has a treasure trove of drinkable pure water.

It has a relativity low cost of living compared to many comparably sized cities in Tennessee and especially nationwide.

It has good local healthcare facilities including a fabulous St Jude cancer facility.

Then what is keeping Memphis from being better?

A larger than normal poverty level caused by a lack of qualified and trained workers for better than minimum wage jobs that require certain skills. These better paying jobs are available but are going unfilled.

An educational system that separates students into those that can afford private education schools with good outcomes and those forced into public education with poor outcomes.

A lack of the traditional family structure based on a two-parent home with values taught at home and in traditional churches. This previously prevalent and proven successful family and church structure has been destroyed by years of failed government poverty programs that encourage welfare dependence and lack of initiative.

Local crime encouraged by gangs and drug culture.

How can we change the above? We encourage your input, suggestions and debate.

Open The Purchasing Records

Tuesday, May 15th, 2018

Open The Purchasing Records

May 15, 2018

There was an interesting article in the CA entitled “Memphis has lost focus”. The article went on to quote the Chairman of the Memphis City Council, Berlin Boyd, saying “We can’t continue down this path and expect a different result”. Also Richard Smith of Federal Express and Chamber of Commerce chairman, demand that elected leaders gut or fix the city/county EDGE board. The EDGE board is well known for handing out tax freezes for various businesses. The Edge board also has rules for minority vendor participation for any EDGE granted pilot. The article stated that Mr. Smith urged the end of minority spending rules.

 

Concerning EDGE minority spending rules the article stated that Boyd said that the biggest beneficiary of the minority spending rules is white women. Assailed by critics, Boyd and Smith agreed to keep the spending rules in place.

 

I have railed against this minority spending requirement for several years. I am not against economically disadvantaged minorities getting a leg up. However what should be changed is the following.

 

The paperwork and legal qualification rules are very complicated and discourage otherwise qualified firms. There should be a common-sense method such as the better business bureau or other independent organization that gives a rating system based on customer satisfaction reports.

 

Most importantly the purchasing system should be open and transparent with the final bids and selection on line and open to all. If a minority firm is the low bidder, so be it. If it is not the low bidder and is selected, then the price differential should be no more than 3% to 5% and then the minority firm should be given a one to two year time to graduate to a no price differential status for future competitive bids.

 

The system now is not transparent and we do not know what minority spending rules are costing us and we do not know who are the beneficiaries.

 

 

 

 

Real World Workforce Development

Saturday, May 5th, 2018

May 2, 2018

 

There was a recent article in the CA titled “Putting a new sprout on technical education”. The article went on to talk about a new Shelby County School Program that will cost $8 million dollars. The article went on to say students will learn hands on skills that lead to an industry certification. This program is part of a massive overhaul of the Shelby County School’s offerings for career and technical education. District leaders say it’s an effort to increase the number of students earning a work certificate before they graduate high school and aligning programs to high-need and high-paying jobs in Memphis. The article talks about various Workforce Development programs which do not seem to produce the trained students for the good paying jobs available. For instance Bolton is adding an agricultural science, technology, engineering and math program, shortened to “agri-STEM.” Students will learn hands-on skills that lead to an industry certification, like flying a drone to survey crops with technology that maps where more water or fertilizer is needed. This sounds high tech and sexy but are these jobs out there in abundance?

 

 

I remember going into the old Memphis School system building and seeing the prominent sign saying, “Every Day, Every Child, College Bound”.

 

 

Now consider that the State of Tennessee funds tuition free education at SW Tennessee Community College for high school graduates funded by over $50 million with a below 10% graduation rate basically for low skilled job training.

 

In this election year we need a candidate for governor who will allow the Tennessee Promise program to pay tuition not only for SW Tennessee Community College but for other non-profit training programs that have a proven record of over 80% graduation rates and a record of good wage job placements for the local employers looking for trained and certified employees. I cannot understand the reluctance of past governors to look at what works based on proven graduation rates but also on proven job placements taking into consideration the wage rates paid after rigorous certified job training programs. Ask your candidates for governor about the issue of allowing the Tennessee Promise money to go where it produces provable results. So much money is now being wasted on workforce development programs that hand out worthless certifications for low paying jobs. To be somebody you have to study and train to do something needed in the real world of available high paying jobs. A worthless certificate after minimal training does not fill the bill.

Why Can’t The Public See Public Bids And Price differentials?

Tuesday, April 10th, 2018

April 10, 2018

 

Why Can’t The Public See Public Bids And Price differentials?

 

Bids for items purchased by public entities should be open and public information. Organizations such as the City of Memphis, Shelby County, MLGW and others paid for by local, state or federal tax money should have transparency on their bids.

However, this is not the case. Here are some local examples.

If you go to the City of Memphis website (www.memphistn.gov) and click on Business and then on RFPS and RFQS (request for proposals and request for quotations) and click on current solicitations you will see a table of upcoming quotations.

However In regards to the posting of Bid Awards online, the City currently does not post these online, but plans are in motion to soon place online links to reports detailing all bid awards for a given time frame plus the awarded vendor name, amount, description of the bid and Division name.  (attached are two examples of this report—one for 2017 and one for 2018 YTD).  However, there is no report available that includes the above information along with details on the losing bidders. Info on losing bidders would have to be obtained via the Open Records Request system on an individual bid basis or by reviewing the contract documents for each awarded contract.

If you look at the above two lists (one for 2017 and on for 2018, you will see the types of items purchased by the City of Memphis and the amounts spent. There are huge amounts of pubic money being spent.

The tax paying public is entitled to know how this money is being spent, who is getting this business, how much higher the other bidders quoted and if the lowest bidder was not awarded the contract, why not.

The rules and regulations for being able to bid on this public business are very complex and discouraging for private businesses to jump though all the hoops. I know several local business who add 10% plus whenever bidding on public buxiness due tothe paperwork.

I asked Shelby County for similar information on purchasing and their reply was as follows.

In response to your inquiry, the County does not publish the information on our website. There is no intentional exclusion of the public’s right to see the information but rather there has never been a demand for the information.  Another problem we have is that we do not have a sophisticated system to process purchasing and contracts information.  We are in the process of obtaining a modern system that will facilitate providing the information in question.

 

Occasionally we will have a request for the information you are citing but it is usually from an unsuccessful bidder or sometimes from a company interested in bidding on a certain service or commodity.  Is there anything in particular that you would like to see?

 

To date I have not gotten any response from the MLGW concerning the question of purchasing transparency.

Now here is the problem with all local public purchasing.

A local news report stated the following. “Shelby County commissioners approved a moratorium Monday, April 2, on all county contracts and budget amendments worth more than $50,000 through the end of August.

The 10-3 commission vote follows concerns some commissioners expressed last week in committee sessions about a multi-year contract worth $20 million for medical services to county corrections center inmates.

The contract is specifically exempted from the county’s ordinance setting percentage goals in awarding county government contracts to minority-owned businesses.”

Now I have no objection to seeing minority-owned businesses getting a leg up in establishing an efficient and competitive private business. If they need a price differential for several years in order to get up and running so be it. But the public should know what it is costing the taxpayers and it is obvious we do not know the extent of this public cost. Let us put it out there so we know what it is costing. What is your opinion?

What Pubic Retiree Healthcare Costs You As A Taxpayer

Tuesday, January 16th, 2018

What Pubic Retiree Healthcare Costs You As A Taxpayer

 

January 16, 2018

 

Years ago, I started investigating healthcare costs for active employees and retirees at the MLGW, the City of Memphis, Shelby County and the school system. At that point (before 2007) there was no requirement that the unfunded liability of medical and other costs for retirees be put on the financial statements of the various local governmental units. I started checking on the unfunded liability which was called OPEB. (Other Post Employment Benefits, mainly health care costs and life insurance).

I was shocked by the amount of unfunded liability. Look at the history of this huge unfunded liability over a certain time period.

OPEB History- unfunded liability

MLGW 2007            658 million

MLGW           2015              461 million   down 30% from 2007

 

City of Memphis 2008                  857 million

City of Memphis 2015                  730 million

City of Memphis 2017                  504 million  down 58% from 2008

 

Old Memphis School System 2008                   1.34 billion

Current Shelby County School System 2016  1.25 billion   down 9% from 2008

 

Shelby County Government 2007                     319 million

Shelby County Government 2016                     101 million   down 69% from 2007

It is obvious that this is still a large problem. But as usual, our Shelby County government recognized the problem early (in 2007 when notified by GASB) and acted. The City of Memphis was slow in acting but eventually addressed the problem. The Memphis school  system as usual has stuck its head in the sand and is hoping for a government bailout. The MLGW is well healed and is slowly addressing the problem.

The next question that occurred to me was “What is the cost to the taxpayers for the portion of annual health care premiums for retirees paid by taxpayers?” I asked for and received the following answers.

MLGW           2528 retirees’ cost/retiree paid by rate payers            $11,733/year

City of Memphis 1524 retirees’  cost/retiree paid by taxpayers            $6466/year

Shelby County   1941 retirees’   cost/retiree paid by taxpayers            $4658/year

 

It is obvious that the MLGW is different and that Shelby County Government is more efficient. In my next posting I will take up the cost to public employees (active and retired) for their annual health care premiums so that you can compare your cost to what public employees pay and look at the annual cost rise since the affordable care act came into our lives.

More Info Needed Before Moving Brooks Museum Downtown

Wednesday, December 27th, 2017

December 27, 2017

What We Need Before Spending Millions On Moving Brooks Museum Downtown

 

Citing “declining enrollment” and “overwhelming real estate debt,” the Memphis College of Art — the storied Overton Park institution that traces its origins to at least the 1930s — on Tuesday announced plans to close. This CA article published October 24th of this year points out the problem of piling on debt without proper planning for debt retirement and a sound financial base.

 

As the plan for the Brooks museum rolls forward by the City of Memphis, let us look back on available information on the two institutions. The only available source of public hard financial information on the Memphis College of Art and the Brooks Museum is the 990 forms (Return of Organization Exempt From Income Tax) provided by Guidestar.

Therefore, I pulled up these forms and here is a brief report on the three last available years.

Memphis College of Art, form 990 for years ending June 30, 2014, 2015 and 2016. The figure shown are the net assets or fund balances (total assets less total liabilities).

June 30, 2014                         $14.8 million

June 30, 2015                         $18.1 million

June 30, 2016                         $16.6 million

 

Memphis Brooks Museum of Art Inc

June 30, 2014                         $6.2 million

June 30, 2015                         $5.8 million

June 30, 2016                         $5.0 million

 

I have attached the complete relevant 990 forms which gives additional information of the Memphis College of Art and The Brooks museum. However, these 990 forms may not reveal the complete story. Apparently, the College of Art made some bad decisions about opening additional facilities downtown.

 

What is needed before embarking on the expensive downtown move by Brooks is a complete most recent financial audit of the Brooks so that all information about expenses, income and debt is fully known by the Memphis taxpayers. The 990 forms do not give enough information to make a informed decision.

 

MLGW Rate Increases

Wednesday, December 13th, 2017

MLGW Rate Increases

 

MLGW has proposed rate increases in gas, electric and water rates over the next few years. MLGW management says that part of the need for increases are related to decreasing sales in product. Well I decided to review the latest annual report available (the year ending December 31st, 2016).

 

The City Charter designates the disposition of revenue from MLGW three divisions, light, gas and water. MLGW is not a profit-making organization but it is required to breakeven and pay it debts and keep a reserve to cover its debts and emergencies with a proper margin. It also pays to the City of Memphis a payment like a for profit business would pay.

 

I have looked at the statements of the three divisions for the year ended 12/31/16 and the electric division lost $12 million dollars after paying $40 million to the City of Memphis. The Gas Division lost $14 million after paying $17.5 million to the City of Memphis. The water division made $9.8 million after paying $4.4 million to the City of Memphis. It is not clear if this includes the 2 million payment for the FedEx arena.

 

It seems clear to me that the MLGW needs a price increase to keep its financial situation secure. It is a well-run organization with well trained employees and with advanced technical knowledge.

 

Now I want to point out that MLGW employees have a much richer health care benefits then the City of Memphis and Shelby County employees. I am gathering current information of these benefits and will be publishing information as soon as I obtain the data.

 

People are becoming energy savers and the combination of advanced energy saving appliances like light bulbs and AC/heating units and smart meters are saving energy and this is a good thing for the ecology. Again this is a well run organization with competitive rates and I hope that whomever replaces Jerry Collins will be as able as he has been.

This and That About The Bicentennial Gateway Project

Monday, November 27th, 2017

This and That About The Bicentennial Gateway Project

 

I recently published the details about this huge proposed project but there were several unanswered questions that needed answers.

 

Here are the points that needed clarification and I pursued and got the answers.

 

On the list for original amounts spent for the presentation of this project was $518,270.97 paid to Stephen Schreiner & Renee Barrett. It turns out that that this amount was for the purchase of two pieces of property close to Bass Pro at 369 and 371 North Main.

Another question concerned the funding for this project which showed Annual Revenues from Land Leases of $297,000 the first year and a total of $3.7 million through 2031. The answer from the City of Memphis was the underlying assumption from the RKG report that the City might lease City-owned land to private entities, the specific land under consideration would be Mud Island. This is only an assumption, as no deal or structure has been developed for a project at this location.

Another question concerned the Brooks Museum of Art and the amount of support that the City of Memphis gives to the Brooks yearly. The City responded that in the FY 2016 net expenditures from the City to the Brooks was $571,448.00. I have attached the latest 990 form detailing the finances of the Brooks Museum. It basically depends on contributions from the City of Memphis and outside donors.

 

The other big factor is the type of bonds that are proposed to finance this and other similar projects like the Fairgrounds project. I am told they will be revenue bonds which generally mean that the City of Memphis, Shelby County and other governmental organizations with tax powers will not be on the hook if the project does not pay for itself on sales tax and property tax increasing revenues. Here is typical revenue bond language.

THE SERIES XXXX BONDS AND THE INTEREST THEREON DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE CITY, THE STATE OF TENNESSEE (THE “STATE”) OR ANY POLITICAL SUBDIVISION THEREOF WITHOUT LIMITATION, THE CITY, SHELBY COUNTY, TENNESSEE (THE “COUNTY”) and so on and so on.

So what this means, if it is revenue bond financing, that the bond buyer is at risk and will take the haircut if the income projections do not meet the projections. Hopefully they will and if so fine. If not, the bond holders suffer. However the reputation of the City will also suffer as it now happening in Puerto Rico and the City of Chicago and the state of Illinois and the City of Detroit in the past.

 

This downtown project and the Fairgrounds proposal needs a lot more discussion and disclosure. What are the risks and what are the rewards?

 

 

 

 

 

 

Open Records At The Shelby County School System

Wednesday, November 15th, 2017

Open Records At The Shelby County School System

 

I have a long history of asking for information from the old Memphis School System and the successor Shelby County school system. Under old Memphis School System obtaining information was very difficult and I actually filed three law suits in Chancery Court to get access to information which I won.

Now with the Shelby County School system it is somewhat easier to get information and I want to report a recent request and the results.

At the request of a representative of a local charter school I asked for pupil attendance information of the Shelby County public school system. The reason that the charter school wanted attendance information was that they were being criticized by the school system administration for their poor attendance record.

I was able to get the attached information about attendance. One is a summary of attendance information and the other is a detail of each particular school.

What struck me were several things revealed by the information.

The charter school people noted that their attendance numbers were affected by the lack of school bus services that are available in public schools. They must depend on parents and guardians to get the children to school.

The other figure which struck me was the percentage of students that are chronically absent in the three schools divisions, elementary, middle and high school.

Look at the figures.

Shelby County Schools

Current enrollment in elementary schools     47,022  15.9% are chronically absent

Current enrollment in middle schools              17,590  16.3% are chronically absent

Current enrollment in high schools                   25,718  33% are chronically absent

Charter Schools

Current enrollment in elementary schools     5002  15.8% are chronically absent

Current enrollment in middle schools              3542  17.3% are chronically absent

Current enrollment in high schools                   4659  21.1% are chronically absent

 

The above figures are about equal in elementary and middle schools but the charter schools are much better in high schools  with a 12% lower absenteeism rate.

These are important figures and should be studied as they reveal a lot about our upcoming children. What explains a 33% chronically absenteeism rate in public high schools?

I ask you to read and offer your opinion on these figures. I asked also for the union contract for Shelby county school teachers. I received it but on the pages where the salaries are, the figures are redacted. I have asked for the redacted information but to date have not received it but have been told that they are working on getting the information to the public taxpayers.

$281M Downtown Cultural Center And Now $160 M For The Fairgrounds

Wednesday, November 8th, 2017

$281M Downtown Cultural Center And Now $160 M For The Fairgrounds

 

I have to give the administration credit for thinking big. And it all will be paid, we hope, with money generated by tax incremental financing due to increased tourism sales taxes and state economic development funds.

The presentation on the downtown cultural center by the administration was well done and presented. I looked at the plan and wondered what had been spent so far for the well done concept work. So I asked the City to tell me what has been spent so far for this work. Here is their answer.

 

Original amounts for the Bicentennial Gateway development project.

# Vendor Original Amount

 33400 RKG Associates $40,000 and another $40,000 for Amendment #1

 33401 SR Consulting $250,000 and another $150,000 for Amendment #1

 33413 Bass, Berry and Sims $250,000

 33885 CH Johnson Consulting $20,000 and another $18,000 for Amendment #1

 34548 Glankler Brown $25,000

 34607 Archimania $128,325

 34619 Stephen Schreiner & Renee Barrett $518,270.97

That is a total so far that they have admitted to of $1.439 million.

I will pursue this further as we need to know what has been spent in addition to the above plus what has been spent on the fairgrounds planning so far. If you have additional questions and want further information let me know.