Archive for May, 2013

Bait And Switch

Wednesday, May 29th, 2013

May 30, 2013

My wife and I just came back from a trip to San Francisco to visit two of our daughters,  a son in law and a new (1 year old) grandchild. Wonderful visit, great weather and good food. However being a dedicated grouch I have to complain about something and why not the airport and the air travel.

First the air travel. In the past we could travel nonstop from Memphis to San Francisco. Now it is a broken flight, Memphis to Dallas, Dallas to San Francisco. This adds 3 to 4 hours to the flight time and by the time I got the reservations, our seats were almost next to the airplane outhouse. Then there is the TSA (transportation security administration). Due to my age I do not have to take off my shoes but almost everything else has to come off including my belt. Long lines, grim looking people and millions of dollars of equipment. Thanks Osama for your contribution to our lives. (This airport security job should be turned over to private contractors but this makes too much sense).

But the real annoyance came on returning to Memphis. Normally I park at Park and Fly but since this has been sold to the Airport authority, I parked at the long term airport parking facility. Last February on a four day trip I parked at the new facility at an advertised price of $6 per day. This is the bait and switch deal as it is now $11.00 per day. I assumed that the $6 price still applied for this trip. WRONG. As I was walking to Kingdom Come to get my car I saw a sign put up by the airport authority (which they should now take down) stating “Don’t do the Airport shuttle, Park here for $6/day”. Therefore my price went from the expected $30.00 to $55.00.

The next question is what did the airport authority pay for the Park and Fly facility at Winchester and Airways? More on this later.

Warning, The Fire Alarm Bell Is Ringing

Tuesday, May 21st, 2013

May 21, 2013

You probably read the article this morning in the CA about the warning from the state of Tennessee about the fiscal condition of the City. (State comptroller warns Memphis officials about city’s fiscal condition).

I have attached a copy of the letter and I have marked sections that are devastating. I have known for some time that they are kicking the can down the road but I did not know about state law in this area. Thank God someone is ringing the fire alarm bell.

Nothing could be clearer. We are becoming Detroit, Stockton and others. The Mayor is already giving in to the unions and proposes adding AFSCME to the pension debt of the City. He is not proposing any real solutions to the problem. We have to cut benefits, salaries and health care costs or we face takeover by the state.

Pension Retreat By Memphis

Tuesday, May 21st, 2013

Last Saturday I went to a meeting where Tennessee Senator Brian Kelsey spoke. He spoke of the new state pension revisions that institutes a hybrid defined contribution plan for state employees including teachers. David Lillard, Tennessee State Treasurer, promoted this. It starts in 2014 and is for new employees. This new plan over the future years will ensure that money is there for retirement income for state employees and teachers. It is the fiscally responsible thing to do for taxpayers and for the employees.

This is very interesting and it has application to things that are being discussed at the City and during the budget hearings.  A similar plan could be done at the City which is badly in need of pension reform and it might affect the funding debate at the county concerning education/budget.

However I have attached two documents from the City of Memphis that shows the following. Instead of reforming pensions, the (more…)

John Willingham, What A Loss!

Sunday, May 19th, 2013

May 20, 2013

I was very saddened to hear about his sudden death. He was the essence of what America stands for. He was energetic, smart, innovative, charming and a producer, not a taker. Although not a graduate engineer, he was an engineer in fact, a guy who knew how to solve problems and think outside the box. He was tremendously creative in all fields.

After his service on the County Commission, he came up with a proposed financial solution to the public money problems we are now seeing in both the City and the County. I have attached a copy of that proposal. Basically the plan instituted a 3% Privilege Payroll Tax that would reduce property taxes by 25% and sales taxes from 9-1/4% to 7%. Naturally the proposal was dismissed by local politicians as not worthy of debate.

I want to extend my sympathy to his wife, children and extended family. However congratulations to John for a life well lived and a tremendous contribution to what makes America unique and great.

Retiree Health Insurance

Thursday, May 16th, 2013

May 16, 2013

Last Monday I wrote about the coming train wreck in health insurance premium increases. Today I want to point out a change that could save the City of Memphis millions of dollars in the coming year and in the future.

Again I point to the Shelby County government as a model of fiscal responsibility. In June 2007 the Shelby County government passed a resolution to provide for OPEB benefits and approve changes to health insurance benefits to employees and retirees.

Shelby County acknowledged that the Government Accounting Standards Board issued Statement No. 45 (GASB 45) and that the new standard recognized that the expense must be recognized as the benefits are earned rather than as they are paid. The resolution went on to say that the County’s actuaries calculated the annual required contribution to be $49 million, a $36 million dollar increase over (more…)

Health Care Train Wreck

Monday, May 13th, 2013

May 13, 2013

Health care costs at the City of Memphis, Shelby County and MLGW are very expensive. Shelby County has been fiscally responsible in the past and their situation is much better than the City of Memphis. MLGW’s health care benefits are much richer and more expensive but they have the income from your utility bills to pay the tab. The City of Memphis is the worst. Active employees’ and retirees’ share of the cost is not fully funded to the 30% level as they are supposed to be. Also the City’s OPEB fund for retiree health care is an empty bucket to the tune of $1.2 billion dollars unfunded liability.

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Look At What The MLGW Has In Store For You Smart Meter Users?

Monday, May 6th, 2013

May 6, 2013

The question is not should we buy 60,000 smart meters. The real question is should we buy any smart meters.

There is one benefit of smart meters that the MLGW claims that is true and that is less meter readers. Regardless of what the MLGW says, The Federal government through TVA will be calling the shots and it is about control and your loss of freedoms. Nationally, smart meters have delivered unemployed meter readers and a deluge of meter data that utilities have no idea what to do with. They delivered little or nothing of value to the consumer. The smart meter also delivered a public increasingly soured on the smart grid, which came to be perceived as a “bait-and-switch” by industry and politicians.

 

It is a question of Trust. Do you trust the MLGW, the City Council, the Tennessee State Government, the TVA and finally the National (more…)

Is Atlanta A Pension Reform Model For Memphis?

Thursday, May 2nd, 2013

May 2, 2013

Atlanta (the core city) is much like Memphis. (The metro area of Atlanta is split up into four counties and has a much larger population than the Memphis metro area.)

Still the comparison is interesting. Atlanta has a core population of 432,000 and Memphis has a population of 652,000. Both core city populations have fallen over the last ten years. Atlanta has 6647 city employees (2224 police, 1021 fire). Memphis has 7568 employees (3028 police and 1862 fire).

Atlanta made some changes to their pension system. Following the bullet points are the actual words from their most recent CAFR (Comprehensive Annual Financial Report). The most important points are:

  • In 2001 they put new city employees (other than fire and police) on a defined contribution plan.
  • Then in 2011, all current employees in the traditional defined benefit plans had to contribute an extra 5 % (up to 12 or 13% of salary) to keep their promised benefits.
  • There is a new defined contribution plan for fire and police and certain employees below grade 19 for employees hired after September 1, 2011 that is quite interesting. There is to be a cap on City contributions and other cost sharing provisions. See below.
  • All in all, these are some major changes. It is significant that Atlanta has finally recognized that defined benefit plans are no longer supportable and changes must be made. Employees must take the same market chances that private sector employees take. In other words your future retirement depends on the success of business and capitalism, not government.

 

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